Filed by Automated Filing Services Inc. (604) 609-0244 - Rancho Santa Monica Developments Inc.

SB-2 1 formsb2.htm REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Filed by Automated Filing Services Inc. (604) 609-0244 - Rancho Santa Monica Developments Inc. - Form SB2

As filed with the Securities and Exchange Commission on January 28, 2005
Registration No. _________

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

FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

RANCHO SANTA MONICA DEVELOPMENTS INC.
(Name of small business issuer in its charter)

NEVADA	6552	83-0414306
(State or jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.

3104 Sunnyhurst Road
North Vancouver, British Columbia
Canada V7K 2G3
Tel: (604) 537-5905
(Address and telephone number of principal executive offices)

Stephen F.X. O’Neill, Esq.
O’NEILL LAW GROUP PLLC
435 Martin Street, Suite 1010, Blaine, WA 98230
Tel: (360) 332-3300
(Name, address and telephone number of agent for service)

Approximate date of commencement of proposed sale to the public:

As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registrations statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If delivery of the Prospectus is expected to be made pursuant to Rule 434, please check the following box. ¨

CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered	Amount to be Registered⁽¹⁾	Proposed Maximum Offering Price Per Unit	Proposed Maximum Aggregate Offering Price⁽²⁾	Amount of Registration Fee⁽²⁾
Common Stock, par value $0.001 per share, previously issued to investors	3,554,332	$0.04	$142,173	$16.73

⁽¹⁾ Total represents 3,554,332 shares issued by Rancho Santa Monica Developments Inc. in a private placement transaction completed in November, 2004.
⁽²⁾ Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission (the “SEC”), acting pursuant to said Section 8(a), may determine.

The information contained in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the “SEC”) is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 25, 2005

PROSPECTUS

RANCHO SANTA MONICA DEVELOPMENTS INC.

3,554,332 SHARES
COMMON STOCK
----------------

The selling stockholders named in this prospectus are offering the 3,554,332 shares of Rancho Santa Monica Developments Inc.’s (the “Company”) common stock offered through this prospectus. The Company has set an offering price for these securities of $0.04 per share of its common stock offered through this prospectus.

			Proceeds to Selling Stockholders
	Offering Price	Commissions	Before Expenses and Commissions

Per Share	$0.04	Not Applicable	$142,173
Total	$0.04	Not Applicable	$142,173

The Company is not selling any shares of its common stock in this Offering and therefore will not receive any proceeds from this Offering.

The Company’s common stock is presently not traded on any market or securities exchange. The sales price to the public is fixed at $0.04 per share until such time as the shares of the Company’s common stock are traded on the Over-The-Counter Bulletin Board (the “OTC Bulletin Board”). Although the Company intends to apply for trading of its common stock on the OTC Bulletin Board, public trading of its common stock may never materialize. If the Company’s common stock becomes traded on the OTC Bulletin Board, then the sale price to the public will vary according to prevailing market prices or privately negotiated prices by the selling stockholders.

---------------

The purchase of the securities offered through this prospectus involves a high degree of risk. You should carefully read and consider the section of this prospectus entitled “Risk Factors” on pages 6 through 9 before buying any shares of the Company’s common stock.

This Offering will terminate nine months after the accompanying registration statement is declared effective by the SEC. None of the proceeds from the sale of stock by the selling stockholders will be placed in escrow, trust or similar account.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

----------------

The Date Of This Prospectus is: January 25, 2005

PROSPECTUS

RANCHO SANTA MONICA DEVELOPMENTS INC.

3,554,332 SHARES
COMMON STOCK
----------------

TABLE OF CONTENTS

	Page

Summary	4

The Offering	5

Risk Factors	6

Risks Related To Our Business

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	6

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	6

Environmental and Other Regulations May Have An Adverse Effect On Our Business	7

We Are Highly Dependent On Our Senior Management	7

The Occurrence In Mexico Of Natural Disasters Could Adversely Affect Our Business	8

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	8

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	8

Risks Related To This Offering

If A Market For Our Common Stock Does Not Develop, Stockholders May Be Unable To Sell
Their Shares	8

If A Market For Our Common Stock Develops, Our Stock Price May Be Volatile	8

If The Selling Stockholders Sell A Large Number Of Shares All At Once Or In Blocks, The
Market Price Of Our Shares Would Most Likely Decline	9

Because Our Stock Is A Penny Stock, Stockholders Will Be More Limited In Their Ability To
Sell Their Stock	9

Use of Proceeds	10

Determination of Offering Price	10

Dilution	10

Selling Stockholders	10

Plan of Distribution	13

Legal Proceedings	14

Directors, Executive Officers, Promoters and Control Persons	14

Security Ownership of Certain Beneficial Owners and Management	16

Description of Securities	17

Interest of Named Experts and Counsel	18

Experts	18

Disclosure of Commission Position of Indemnification for Securities Act Liabilities	19

Organization Within Last Five Years	19

Description of Business	20

Management’s Discussion and Analysis or Plan of operation	24

Description of Property	26

Certain Relationships and Related Transactions	27

Market for Common Equity and Related Stockholder Matters	28

Executive Compensation	31

Financial Statements	33

Changes in and Disagreements with Accountants	34

Where You Can Find More Information	34

Until ninety days after the date this registration statement is declared effective, all dealers that effect transactions in these securities whether or not participating in this Offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

SUMMARY

As used in this prospectus, unless the context otherwise requires, “we”, “us”, “our”, “our company” or “Rancho” refers to Rancho Santa Monica Developments Inc. All dollar amounts in this prospectus are in U.S. dollars unless otherwise stated. The following summary is not complete and does not contain all of the information that may be important to you. You should read the entire prospectus before making an investment decision to purchase our common stock.

RANCHO SANTA MONICA DEVELOPMENTS INC.

We are a development stage company focused on the development of real estate. We have acquired real property located in Solidaridad, Mexico (the “Property”) on which we plan to construct certain facilities and provide management services for the apartment units being constructed on the adjoining property. Our plan of operation is to acquire, manage, and develop income-producing real property in Mexico and acquire real property in Mexico for long-term capital gains. See “Description of Business”, below.

We have not earned any revenues to date. We plan to earn revenues from management services provided to the apartment units being constructed on the adjoining property and the operation of cabanas and a reception area on the Property. 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 Property or that the revenues generated will exceed our operating costs. See “Risk Factors” below.

Our financial information as of November 30, 2004 is summarized below:

Balance Sheet

	As of November 30, 2004 (Audited)
Cash	$43,154
Total Assets	$123,154
Liabilities	$55,331
Total Stockholders’ Equity	$67,823

Statement of Operations and Comprehensive Loss

	As of November 30, 2004 (Audited)
Revenue	$ -
Net Loss for the Period	($40,107)
Net Loss Per Share of Common Stock	($0.01)

About Us

We were incorporated on May 28, 2004 under the laws of the State of Nevada. Our principal offices are located at 3104 Sunnyhurst Road, North Vancouver, British Columbia, Canada V7K 2G3. Our telephone number is (604) 537-5905.

THE OFFERING

The Issuer:	Rancho Santa Monica Developments Inc.

Selling Stockholders:	The selling stockholders named in this prospectus are existing stockholders of our company who purchased shares of our common stock from Rancho in November, 2004 in a private placement transaction. The issuance of the shares by us to the selling stockholders was exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”). See “Selling Stockholders”.

Securities Being Offered:	Up to 3,554,332 shares of our common stock, par value $0.001 per share.

Offering Price:	The offering price of the common stock is $0.04 per share. We intend to apply to the OTC Bulletin Board to allow the trading of our common stock upon our becoming a reporting entity under the Securities Exchange Act of 1934 (the “Exchange Act”). If our common stock becomes so traded and a market for the stock develops, the actual price of stock will be determined by prevailing market prices at the time of sale or by private transactions negotiated by the selling stockholders. The offering price would thus be determined by market factors and the independent decisions of the selling stockholders.

Duration of Offering:	This Offering will terminate nine months after the accompanying registration statement is declared effective by the SEC.

Minimum Number of Shares To Be Sold in This Offering:	None.

Common Stock Outstanding Before and After the Offering:	7,564,332 shares of our common stock are issued and outstanding as of the date of this prospectus. All of the common stock to be sold under this prospectus will be sold by existing stockholders.

Use of Proceeds:	We will not receive any proceeds from the sale of the common stock by the selling stockholders.

Risk Factors:	See “Risk Factors” and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock, when and if we trade at a later date, could decline due to any of these risks, and you may lose all or part of your investment.

Risks Related to Our Business

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 $40,107 for the period from May 28, 2004 (inception) to November 30, 2004, 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. These factors raise substantial doubt that we will be able to continue as a going concern. We have cash in the amount of $43,154 as of the date of this prospectus. Our total expenditures over the next twelve months are anticipated to be approximately $65,000, the majority of which is due to the development of our Property and general, legal, accounting and administrative expenses associated with this Offering and as a result of our becoming a reporting issuer under the Exchange Act. 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 Property fails to generate revenues as anticipated.

Our financial statements included with this prospectus 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 projects require significant 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 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 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 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 significant 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.

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 property in Mexico which can be developed 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:

•	civil penalties

•	remediation expenses

•	natural resource damages

•	personal injury damages

•	potential injunctions

•	cease and desist orders

•	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.

Our future success is highly dependent upon the continued employment of our senior management. The loss of one or more of these individuals could have a material adverse effect on our business.

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.

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, 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.

Risks Related To This Offering

If A Market For Our Common Stock Does Not Develop, Stockholders May Be Unable To Sell Their Shares.

There is currently no market for our common stock and a market may never develop. We currently plan to apply for listing of our common stock on the OTC Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms a part. However, our shares may never be traded on the bulletin board or, if traded, a public market may never materialize. If our common stock is not traded on the bulletin board or if a public market for our common stock does not develop, investors may not be able to re-sell the shares of our common stock that they have purchased and may lose all of their investment.

If A Market For Our Common Stock Develops, Our Stock Price May Be Volatile.

There is no market for our common stock and there is no assurance that a market will develop. If a market develops, we anticipate that the market price of our common stock will be subject to wide fluctuations in response to several factors, such as:

•	actual or anticipated variations in our results of operations;

•	our ability or inability to generate revenues; and

•	increased competition.

Further, we anticipate that our common stock may be traded on the OTC Bulletin Board. Companies traded on the OTC Bulletin Board have traditionally experienced extreme price and volume fluctuations. There is no assurance that our common stock will be traded on the OTC Bulletin Board. If our common stock is traded, our stock price may be adversely impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.

If The Selling Stockholders Sell A Large Number Of Shares All At Once Or In Blocks, The Market Price Of Our Shares Would Most Likely Decline.

The selling stockholders are offering 3,554,332 shares of our common stock through this prospectus. Our common stock is presently not traded on any market or securities exchange, but should a market develop, shares sold at a price below the current market price at which the common stock is trading will cause that market price to decline. Moreover, the offer or sale of a large number of shares at any price may cause the market price to fall. The outstanding shares of common stock covered by this prospectus represent approximately 46.9% of the common stock outstanding as of the date of this prospectus.

Because Our Stock Is A Penny Stock, Stockholders Will Be More Limited In Their Ability To Sell Their Stock.

The shares offered by this prospectus constitute a penny stock under the Exchange Act. The shares will remain classified as a penny stock for the foreseeable future. The classification as a penny stock makes it more difficult for a broker/dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker/dealer engaged by the purchaser for the purpose of selling his or her shares will be subject to rules 15g-1 through 15g-10 of the Exchange Act. Rather than having to comply with these rules, some broker-dealers will refuse to attempt to sell a penny stock.

The "penny stock" rules adopted by the SEC under the Exchange Act subjects the sale of the shares of our common stock to certain regulations which impose sales practice requirements on broker/dealers. For example, brokers/dealers selling such securities must, prior to effecting the transaction, provide their customers with a document that discloses the risks of investing in such securities. Included in this document are the following:

•	the bid and offer price quotes in and for the "penny stock", and the number of shares to which the quoted prices apply.

•	the brokerage firm's compensation for the trade.

•	the compensation received by the brokerage firm's sales person for the trade.

In addition, the brokerage firm must send the investor:

•	a monthly account statement that gives an estimate of the value of each "penny stock" in the investor's account.

•	a written statement of the investor's financial situation and investment goals.

Legal remedies, which may be available to you as an investor in "penny stocks", are as follows:

•	if "penny stock" is sold to you in violation of your rights listed above, or other federal or states securities laws, you may be able to cancel your purchase and get your money back.

•	if the stocks are sold in a fraudulent manner, you may be able to sue the persons and firms that caused the fraud for damages.

•	if you have signed an arbitration agreement, however, you may have to pursue your claim through arbitration.

If the person purchasing the securities is someone other than an accredited investor or an established customer of the broker/dealer, the broker/dealer must also approve the potential customer's account by obtaining information concerning the customer's financial situation, investment experience and investment objectives. The broker/dealer must also make a determination whether the transaction is suitable for the customer and whether the customer has sufficient knowledge and experience in financial matters to be reasonably expected to be capable of evaluating the risk of transactions insuch securities. Accordingly, the SEC's rules may limit the number of potential purchasers of the shares of our common stock. See “Market For Common Equity And Related Stockholder Matters – No Public Market for Common Stock”, below.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling stockholders.

DETERMINATION OF OFFERING PRICE

The $0.04 per share offering price of our common stock was determined based on our internal assessment of what the market would support. Since our inception we have completed the following private offerings of our common stock:

•	We issued 4,000,000 shares of common stock on May 28, 2004 at a price of $0.001 per share to our president, secretary and treasurer, Mr. Graham Alexander.

•	We completed an offering of 3,564,332 shares of our common stock at a price of $0.03 per share to a total of 42 purchasers on November 30, 2004.

There is no relationship whatsoever between the offering price of the common stock held by the selling stockholders and our assets, earnings, book value or any other objective criteria of value.

We intend to apply to the OTC Bulletin Board for the trading of our common stock upon our becoming a reporting entity under the Exchange Act. We intend to file a registration statement under the Exchange Act concurrently with the effectiveness of the registration statement of which this prospectus forms a part. If our common stock becomes so traded and a market for the stock develops, the actual price of stock will be determined by prevailing market prices at the time of sale or by private transactions negotiated by the selling stockholders named in this prospectus. The offering price would thus be determined by market factors and the independent decisions of the selling stockholders named in this prospectus.

DILUTION

The common stock to be sold by the selling stockholders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution to our existing stockholders.

SELLING STOCKHOLDERS

The selling stockholders named in this prospectus are offering all of the 3,554,332 shares of common stock offered through this prospectus. The selling stockholders acquired the 3,554,332 shares of common stock offered through this prospectus from us at a price of $0.03 per share in an offering that was exempt from registration under Regulation S of the Securities Act and completed on November 30, 2004.

The following table provides as of January 25, 2005 information regarding the beneficial ownership of our common stock held by each of the selling stockholders, including:

1.	the number of shares beneficially owned by each prior to this Offering;
2.	the total number of shares that are to be offered by each;
3.	the total number of shares that will be beneficially owned by each upon completion of the Offering;
4.	the percentage owned by each upon completion of the Offering; and
5.	the identity of the beneficial holder of any entity that owns the shares.

	Beneficial Ownership Before Offering⁽¹⁾		Number of Shares Being Offered	Beneficial Ownership After Offering⁽¹⁾
Name Of Selling Stockholder⁽¹⁾	Number of Shares	Percent⁽²⁾	Number of Shares Being Offered	Number of Shares	Percent⁽²⁾
Bryce R. Alden	166,666	2.2%	166,666	NIL	*
Julia Alexander	23,000	*	23,000	NIL	*
Emmanuel Asprakis	35,000	*	35,000	NIL	*
Loris Bidese	10,000	*	10,000	NIL	*
Cheryl Boegeman	100,000	1.3%	100,000	NIL	*
Ralph Boegeman	100,000	1.3%	100,000	NIL	*
Shelley Boychuk	100,000	1.3%	100,000	NIL	*
Omar Carrillo Camps	375,000	4.9%	375,000	NIL	*
Deny Ciarniello	100,000	1.3%	100,000	NIL	*
Ron Daase	100,000	1.3%	100,000	NIL	*
Peter A. De Vette	50,000	*	50,000	NIL	*
Juan Duran	150,000	2%	150,000	NIL	*
Janice E. Flormata	65,000	*	65,000	NIL	*
Terry Frewer	375,000	4.9%	375,000	NIL	*
Sharen M. Frewing	10,000	*	10,000	NIL	*
Gordon Garrard	50,000	*	50,000	NIL	*
Linda Hu	10,000	*	10,000	NIL	*
Elizabeth Jalbuena	30,000	*	30,000	NIL	*
Maria Charity Jalbuena	150,000	2%	150,000	NIL	*
Charles F. Jarvis	50,000	*	50,000	NIL	*
Sonia Jordan	20,000	*	20,000	NIL	*
Chen Pik Kuan	100,000	1.3%	100,000	NIL	*
Robert Matthews	100,000	1.3%	100,000	NIL	*
Angela Meadows	100,000	1.3%	100,000	NIL	*
Jean Munday	100,000	1.3%	100,000	NIL	*
Clara Pabon	116,666	1.5%	116,666	NIL	*
Jonn Randel	25,000	*	25,000	NIL	*

	Beneficial Ownership Before Offering⁽¹⁾		Number of Shares Being Offered	Beneficial Ownership After Offering⁽¹⁾
Name Of Selling Stockholder⁽¹⁾	Number of Shares	Percent⁽²⁾	Number of Shares Being Offered	Number of Shares	Percent⁽²⁾
Lucille Reyes	10,000	*	10,000	NIL	*
Marcela E. Reyes	300,000	4%	300,000	NIL	*
Priscilla Reyes	10,000	*	10,000	NIL	*
Alban Sagastume	3,000	*	3,000	NIL	*
Cheryl A. Silver	100,000	1.3%	100,000	NIL	*
Crisanta Torillo Standard	30,000	*	30,000	NIL	*
Ed Strohmaier	200,000	2.6%	200,000	NIL	*
Horst Studensky	50,000	*	50,000	NIL	*
Rey Orlando Sua Carreno	3,000	*	3,000	NIL	*
Ricardo Valencia	17,000	*	17,000	NIL	*
Bert Van Der Wolf	150,000	2%	150,000	NIL	*
Bruce Vanderbrink	50,000	*	50,000	NIL	*
Enoch Y.S. Wang	10,000	*	10,000	NIL	*
Solomon Wang	10,000	*	10,000	NIL	*
TOTAL	3,554,332	46.9%	3,554,332	NIL	*

Notes

*	Represents less than 1%

⁽¹⁾	The named party beneficially owns and has sole voting and investment power over all shares or rights to these shares, unless otherwise shown in the table. The numbers in this table assume that none of the selling stockholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold.

⁽²⁾	Applicable percentage of ownership is based on 7,564,332 common shares outstanding as of January 25, 2005, plus any securities held by such security holder exercisable for or convertible into common shares within sixty (60) days after the date of this prospectus, in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended.

Other than Cheryl Boegeman, the former Secretary of Rancho, Ralph Boegeman who is the husband of Cheryl Boegeman, and Julia Alexander who is the mother of Graham Alexander our President, Treasurer and Secretary, none of the selling stockholders:

	(i)	has had a material relationship with us or any of our affiliates other than as a stockholder at any time within the past three years; or

	(ii)	has ever been one of our officers or directors.

PLAN OF DISTRIBUTION

This prospectus is part of a registration statement that enables the selling stockholders to sell their shares on a continuous or delayed basis for a period of nine months after this registration statement is declared effective. The selling stockholders may sell some or all of their common stock in one or more transactions, including block transactions:

1.	On such public markets as the common stock may from time to time be trading;

2.	In privately negotiated transactions;

3.	Through the writing of options on the common stock;

4.	In short sales; or

5.	In any combination of these methods of distribution.

The sales price to the public is fixed at $0.04 per share until such time as the shares of our common stock are traded on the OTC Bulletin Board. Although we intend to apply for trading of our common stock on the over-the-counter bulletin board, public trading of our common stock may never materialize. If our common stock becomes traded on the OTC Bulletin Board, then the sales price to the public will vary according to the selling decisions of each selling stockholder and the market for our stock at the time of resale. In these circumstances, the sales price to the public may be:

1.	The market price of our common stock prevailing at the time of sale;

2.	A price related to such prevailing market price of our common stock; or

3.	Such other price as the selling stockholders determine from time to time.

The selling stockholders named in this prospectus may also sell their shares directly to market makers acting as agents in unsolicited brokerage transactions. Any broker or dealer participating in such transactions as agent may receive a commission from the selling stockholders, or, if they act as agent for the purchaser of such common stock, from such purchaser. The selling stockholders will likely pay the usual and customary brokerage fees for such services.

We can provide no assurance that all or any of the common stock offered will be sold by the selling stockholders named in this prospectus.

We are bearing all costs relating to the registration of the common stock. The selling stockholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.

The selling stockholders named in this prospectus must comply with the requirements of the Securities Act and the Exchange Act in the offer and sale of the common stock. The selling stockholders and any broker-dealers who execute sales for the selling stockholders will be deemed to be an "underwriter" within the meaning of the Securities Act in connection with such sales. In particular, during such times as the selling stockholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and may, among other things:

1.	Not engage in any stabilization activities in connection with our common stock;

2.	Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and

3.	Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Exchange Act.

The selling stockholders should be aware that the anti-manipulation provisions of Regulation M under the Exchange Act will apply to purchases and sales of shares of common stock by the selling stockholders, and that there are restrictions on market-making activities by persons engaged in the distribution of the shares. Under Regulation M, the selling stockholders or their agents may not bid for, purchase, or attempt to induce any person to bid for or purchase, shares of our common stock while such Selling Stockholder is distributing shares covered by this prospectus. Accordingly, the selling stockholders are not permitted to cover short sales by purchasing shares while the distribution is taking place. The selling stockholders are advised that if a particular offer of common stock is to be made on terms constituting a material change from the information set forth above with respect to the Plan of Distribution, then, to the extent required, a post-effective amendment to the accompanying registration statement must be filed with the SEC.

LEGAL PROCEEDINGS

We are not currently a party to any legal proceedings.

Our agent for service of process in Nevada is Cane & Associates LLP of 3273 East Warm Springs Road, Las Vegas, Nevada 89120.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Our executive officers and directors and their respective age and titles as of January 25, 2005 are as follows:

Name and Address	Age	Position

GRAHAM G. ALEXANDER	36	Director, President, Secretary and Treasurer
3104 Sunnyhurst Road
North Vancouver, British Columbia
Canada V7K 2G3

ANGELA MANETTA	43	Vice-President
7119 Halifax Street
Burnaby, British Columbia
Canada V5A 1M1

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years:

Graham G. Alexander is our President, Secretary, Treasurer and our sole member of the board of directors and has served in those capacities since our inception. Mr. Alexander obtained his Bachelor of Applied Sciences at the University of British Columbia in 1992. In 1994 and 1995 Mr. Alexander worked for a New York engineering company in Coatzacoalcos, Mexico that was responsible for building the petrochemical head office of Pemex, the Mexican government controlled oil and gas company. From 1995 to 1996 Mr. Alexander worked for Future Shop Sales in Vancouver, from 1997 to 2000 he worked for Canaccord Capital Corporation and from 2000 to 2003 Mr. Alexander worked for Global Securities Corporation. Mr. Alexander was born in Mexico and is fluent in Spanish.

Angela Manetta is our Vice-President and has served in that capacity since October 1, 2004. Ms. Manetta attended SFU and graduated in 1984 with a Bachelor of Education. In 1985, she completed a one-year teaching practicum program at SFU, and has been employed as a teacher, teaching French and Math for the past 18 years.

During our development stage, Mr. Alexander and Ms. Manetta each intend to devote approximately 8-10 hours per week of their time to our business. If, however, the demands of our business require more business time, such as raising additional capital or addressing unforeseen issues with regard to our plan of operation,

they are prepared to adjust their timetable to devote more time to our business. However, they may not be able to devote sufficient time to the management of our business, as and when needed.

Compensation

We presently do not pay our directors any salary for serving as directors of our company. Pursuant to a management consulting agreement dated as of October 1, 2004, between Rancho and Graham G. Alexander, as extended on December 31, 2004 (the “Alexander Consulting Agreement”), Mr. Alexander agreed to provide certain management consulting services to us as our president in consideration of: (i) a fee of $1,800 per month to December 31, 2004 and at a rate of $800 thereafter; (ii) the issuance of incentive options in such amounts as Rancho may determine at its discretion; and (iii) reimbursement of reasonable travel and promotional expenses incurred by Mr. Alexander in the course of providing his consulting services. The Alexander Consulting Agreement is for a renewable term expiring December 31, 2005, and may be terminated at any time in the event of a material breach as further described in the Alexander Consulting Agreement.

Pursuant to a management consulting agreement dated as of October 1, 2004, between Rancho and Angela Manetta, as extended December 31, 2004 (the “Manetta Consulting Agreement”) Ms. Manetta agreed to provide certain management consulting services to us as our vice-president in consideration of: (i) a fee of $1,800 per month and at a rate of $200 thereafter; (ii) the issuance of incentive options in such amounts as Rancho may determine at its discretion; and (iii) reimbursement of reasonable travel and promotional expenses incurred by Ms. Manetta in the course of providing her consulting services. The Manetta Consulting Agreement is for a renewable term expiring December 31, 2005, and may be terminated at any time in the event of a material breach as further described in the Manetta Consulting Agreement.

Other than as described above, we have no compensation arrangements with our officers and directors.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

Significant Personnel

We have no significant personnel other than our officers and directors. We conduct our business through agreements with consultants and arms-length third parties.

Committees of the Board Of Directors

Our audit committee presently consists of our sole director. We do not have a compensation committee, nominating committee, an executive committee of our board of directors, stock plan committee or any other committees.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of January 25, 2005 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) our sole director, (iii) named executive officers, and (iv) officers and directors as a group. Unless otherwise indicated, the stockholders listed possess sole voting and investment power with respect to the shares shown.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Common Stock⁽¹⁾
Common Stock	Graham G. Alexander President, Secretary, Treasurer Director 3104 Sunnyhurst Road North Vancouver, British Columbia Canada V7K 2G3	4,000,000 Direct	52.9%
Common Stock	Angela Manetta Vice President 7119 Halifax Street Burnaby, British Columbia Canada V5A 1M1	110,000 Direct and Indirect⁽²⁾	1.4%
Common Stock	All Officers and Directors as a Group (2 persons)	4,110,000	54.3%
Holders of More than 5% of Our Common Stock
Common Stock	Graham G. Alexander President, Secretary, Treasurer Director 3104 Sunnyhurst Road North Vancouver, British Columbia Canada V7K 2G3	4,000,000 Direct	54.3%

Notes

⁽¹⁾	Applicable percentage of ownership is based on 7,564,332 shares of common stock issued and outstanding as of January 25, 2005, together with securities exercisable or convertible into shares of common stock within 60 days of January 25, 2005 for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to securities exercisable or convertible into shares of common stock that are currently exercisable or exercisable within 60 days of January 25, 2005 are deemed to be beneficially owned by the person holding such options for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

⁽²⁾	Consists of 10,000 shares of our common stock held by Ms. Manetta and an option to purchase 100,000 shares of our common stock that is exercisable within 60 days of January 25, 2005.

Security Ownership of Management

We are not aware of any arrangement that might result in a change in control in the future.

DESCRIPTION OF SECURITIES

General

Our authorized capital stock consists of 100,000,000 shares of common stock, with a par value of $0.001 per share, and 100,000,000 shares of preferred stock, with a par value of $0.001 per share. As of January 25, 2005, there were 7,564,332 shares of our common stock issued and outstanding that were held of record by forty three (43) registered stockholders. We have not issued any shares of preferred stock.

Common Stock

Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law or provided in any resolution adopted by our board of directors with respect to any series of preferred stock, the holders of our common stock will possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of our common stock representing one-percent (1%) of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.

Subject to any preferential rights of any outstanding series of preferred stock created by our board of directors from time to time, the holders of shares of our common stock will be entitled to such cash dividends as may be declared from time to time by our board of directors from funds available therefor. See "Dividend Policy."

Subject to any preferential rights of any outstanding series of preferred stock created from time to time by our board of directors, upon liquidation, dissolution or winding up of Rancho, the holders of shares of our common stock will be entitled to receive pro rata all assets of Rancho available for distribution to such holders.

In the event of any merger or consolidation of our company with or into another company in connection with which shares of our common stock are converted into or exchangeable for shares of stock, other securities or property (including cash), all holders of our common stock will be entitled to receive the same kind and amount of shares of stock and other securities and property (including cash).

Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.

Preferred Stock

Our board of directors is authorized by our articles of incorporation to divide the authorized shares of our preferred stock into one or more series, each of which shall be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. Our board of directors is authorized, within any limitations prescribed by law and our Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock including but not limited to the following:

	(a)	the rate of dividend, the time of payment of dividends, whether dividends are cumulative, and the date from which any dividends shall accrue;

	(b)	whether shares may be redeemed, and, if so, the redemption price and the terms and conditions of redemption;

	(c)	the amount payable upon shares of preferred stock in the event of voluntary or involuntary liquidation;

	(d)	sinking fund or other provisions, if any, for the redemption or purchase of shares of preferred stock;

	(e)	the terms and conditions on which shares of preferred stock may be converted, if the shares of any series are issued with the privilege of conversion;

	(f)	voting powers, if any, provided that if any of the preferred stock or series thereof shall have voting rights, such preferred stock or series shall vote only on a share for share basis with our common stock on any matter, including but not limited to the election of directors, for which such preferred stock or series has such rights; and

	(g)	subject to the above, such other terms, qualifications, privileges, limitations, options, restrictions, and special or relative rights and preferences, if any, of shares or such series as our board of directors may, at the time so acting, lawfully fix and determine under the laws of the State of Nevada.

Dividend Policy

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.

Share Purchase Warrants

We have not issued and do not have outstanding any warrants to purchase shares of our common stock.

Nevada Anti-Takeover laws

Nevada Revised Statutes sections 78.378 to 78.3793 provide state regulation over the acquisition of a controlling interest in certain Nevada corporations unless the Articles of Incorporation or Bylaws of the Corporation provide that the provisions of these sections do not apply. Our Articles of Incorporation state that these provisions do not apply.

INTERESTS OF NAMED EXPERTS AND COUNSEL

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in Rancho or any of its subsidiaries. Nor was any such person connected with Rancho or any of its subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

EXPERTS

O’Neill Law Group, PLLC has provided an opinion on the validity of our common stock.

Morgan & Company, Chartered Accountants (“Morgan”), our independent registered public accounting firm, has audited our financial statements included in this prospectus and registration statement to the extent and for the periods set forth in their audit report. Morgan has presented their report with respect to our audited financial statements. The report of Morgan is included in reliance upon their authority as experts in accounting and auditing.

DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Our Articles of Incorporation provide that we will indemnify an officer, director, or former officer or director, to the full extent permitted by law. We have been advised that in the opinion of the SEC indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court's decision.

Reports to Security Holders

At this time, we are not required to provide annual reports to security holders. However, stockholders and the general public may view and download copies of all of our filings with the SEC, including annual reports, quarterly reports, and all other reports required under the Exchange Act, by visiting the SEC site (http://www.sec.gov) and performing a search of our electronic filings. We plan to register as a reporting company under the Exchange Act concurrent with the effectiveness of this registration statement. Upon the effectiveness of the Form SB-2 registration statement, we will be required to file quarterly and annual reports and other information required by the Exchange Act with the SEC. You may inspect our filings including the registration statement, exhibits and schedules filed with the SEC at the SEC’s principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The SEC also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the SEC. Our registration statement and the referenced exhibits can also be found on this site.

ORGANIZATION WITHIN LAST FIVE YEARS

We were incorporated on May 28, 2004 under the laws of the State of Nevada.

Pursuant to Rule 405 of the Securities Act of 1933, Mr. Alexander is our sole promoter by virtue of his role in founding and organizing our company since its inception. See “Certain Relationships and Related Transactions” below.

DESCRIPTION OF BUSINESS

In General

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 are constructing cabanas and a reception area and plan to provide management services for the apartment units being constructed on land which is adjacent to our Property. Our plan of operation is to acquire, manage, and develop income-producing real property in Mexico and acquire real property in Mexico for long-term capital gains.

We have not earned any revenues to date. We plan to earn revenues from management services provided to the apartment units being constructed on the land adjacent to the Property and the operation of certain facilities on the Property. 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 Property or that the revenues generated will exceed our operating costs.

Acquisition of Solidaridad Property

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

•	In consideration of the Vendor’s grant of all of its interests in the Mexico Property to us, we: (i) made a payment of $30,000 to the Vendor, and (ii) issued an unsecured promissory note to the Vendor in the amount of $50,000, plus accrued interest at a rate of 12% per year, maturing on November 29, 2006.

•	We acknowledged that nine apartment units (the “Units”) are being constructed by the Vendor on land adjacent to the Mexico Property and are intended to be sold or leased to potential tenants (the “Tenants”) on completion of construction;

•	We agreed to provide septic and water services to Tenants at a rate of $50 per Unit per month;

•	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, property management services, maintenance and gardening services for the Mexico Property for a fee of $250 per Unit per month; and

•	We agreed to grant to the Vendor and any Tenant, access to the road presently existing on the Mexico Property.

Prior to entering into the Purchase Agreement the Vendor 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 Purchase Agreement, the Vendor 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 Mexico Property. SEMARNAT is the Mexican federal agency responsible for environmental protection. Once the permit is approved, we expect to obtain a local permit from the municipality of Solidaridad for our proposed business operations on the Mexico Property. We expect to receive the permit from PROFEPA within the next two months.

Under the terms of the Purchase Agreement the Vendor 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 Mexico property. Under Mexican law we own the right to possess and make use of the Mexico Property but do not own title to the property until a legal survey is completed by the Mexican government.

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 Description

Revenue

In addition to providing maintenance services and septic/water services to Tenants, we plan to construct a reception area and two cabanas on the Mexico Property for rental to Tenants. Initially, we anticipate revenue will be generated through the following channels:

	Revenue Stream	Projected Fee
	Rental of Cabanas	$60 per Cabana per night
	Management Services	$10 per Unit per night
	Maintenance, Security and Gardening Services	$250 per Unit per month
	Septic and Water Services	$50 per Unit per month
	Total	$6,600⁽¹⁾

	(1) Assumes rental of cabanas and provision of management services each night.

COMPETITION

•	develop rental facilities

•	attract purchasers

•	sell undeveloped rural land

GOVERNMENT REGULATION

Our present operations and development activities in Mexico, are subject to Mexican federal, state and local laws and regulations, 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 the Rancho is in compliance in all material respects with all Mexican federal, 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 its present properties. The possibility exists that in the future that Rancho and its operations will encounter: (i) newer and stricter federal, 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.

Insurance

As of the date of this prospectus 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 Mexico 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. We plan to obtain comprehensive liability insurance once we complete development of our Mexico Property.

Employees

We have no employees as of the date of this prospectus. We conduct our business largely through agreements with consultants and arms-length third parties. We do not intend to hire any employees over the next twelve months.

Research and Development Expenditures

We have not incurred any research or development expenditures since our incorporation.

Subsidiaries

We have no subsidiaries.

Patents and Trademarks

We do not own, either legally or beneficially, any patent or trademark.

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Plan of operation

Our business plan is to continue to develop, maintain and manage our Mexico Property. We do not anticipate earning revenues until such time as the Units are constructed on the land adjacent to our Mexico 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 Mexico Property or that the revenues generated will exceed the operating costs of our business. We have no employees as of the date of this prospectus. We conduct our business largely through agreements with consultants 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 - COMPANY START-UP • Construct Cabanas. • Complete construction of water and septic facilities for the provision of water services. • Construct reception area. • Vendor completes construction of Apartment Units	$10,000	3 Months
PHASE II – MANAGEMENT OF MEXICO 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:

	*Planned Expenditures Over*
*Category*	*The Next Twelve Months*
Professional Fees	$31,000⁽¹⁾
General Administrative Expenses	$9,000
Consulting Fees	$9,600
TOTAL	$49,600
⁽¹⁾Including the estimated costs of this Offering.

We have cash in the amount of $43,154 as of the date of this prospectus. Our total expenditures over the next twelve months are anticipated to be approximately $65,000, the majority of which is due to the development of our Mexico Property and general, legal, accounting and administrative expenses associated with this Offering and as a result of our becoming a reporting issuer under the Exchange Act. After the twelve month period, we may require additional financing for operational expenses and to pursue our plan of operation.

In the event we do not generate any revenues from our Mexico 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.

Results Of Operations For the Period Ending November 30, 2004

We have not earned any revenues since inception. We do not anticipate earning revenues until such time as we complete the development of our Mexico Property. 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 management of our Mexico Property or that the revenues generated will exceed the operating costs of our business.

Operating Expenses

We incurred operating expenses in the amount of $40,107 for the period from May 28, 2004 (inception) to November 30, 2004. Operating expenses for this period included the following expenses:

		Period From Inception
	Operating Expenses	to September 30, 2004
	Consulting Fees	$7,200
	Professional Fees	$31,108
	General and Administrative Expenses	$1,799
	Total Operating Expenses	$40,107

We anticipate our operating expenses will increase as we undertake our plan of operation. The increase will be attributable to our continuing development of our business operations. We anticipate our ongoing operating expenses will also increase once we become a reporting company under the Exchange Act.

Net Loss

We incurred a loss in the amount of $40,107 for the period from inception to November 30, 2004. Our loss was entirely attributable to operating expenses.

Liquidity and Capital Resources

We have not attained profitable operations and are dependent upon obtaining financing to further develop our Mexico Property. For these reasons our auditors stated in their report that to our audited financial statements they have substantial doubt we will be able to continue as a going concern.

We have cash of $43,154 and working capital of $37,823 as of the date of this prospectus. We estimate that the completion of development of our Mexico Property will cost approximately $15,000. Our total expenditures over the next twelve months are anticipated to be approximately $65,000, the majority of which is due to the development of our Mexico Property and general, legal, accounting and administrative expenses

associated with this Offering and as a result of our becoming a reporting issuer under the Exchange Act. To date we have expended $6,017 of the $11,017 estimated costs of this Offering.

As at January 25, 2005, unless we generate revenues from our Mexico Property, we may not have sufficient cash on hand to fund our proposed expenditures for the next twelve months. We will also require additional funding in the event that our current cash on hand is insufficient for any additional work proposed or if there are any unexpected development costs for our Mexico Property.

Future Financings

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 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.

DESCRIPTION OF PROPERTY

Office Location

We rent approximately 100 square feet of office space located at the home of our President Mr. Graham Alexander. The office is located at the home of our President, Mr. Graham Alexander, at 3104 Sunnyhurst Road, North Vancouver, British Columbia, Canada, V7K 2G3. The office rental is provided at a cost of $100 per month. This rental is on a month-to-month basis with no formal agreements.

Our month-to-month rental arrangements will allow us flexibility in moving if we employ more personnel, however, we believe these facilities are adequate in size to handle all of our current operations for the foreseeable future.

Mexico Property

We entered into an agreement dated for reference November 29, 2004 with Monica Galan-Rios pursuant to which we acquired certain lands located in Solidaridad, Mexico consisting of approximately 2,120 square meters. Under the terms of the Purchase Agreement the Vendor 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 Mexico property. Under Mexican law we own the right to possess and make use of the Mexico Property but do not own title to the property until a legal survey is completed by the Mexican government.

The Mexico Property is located on 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. 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. Solidaridad is one of the eight municipalities that make up the Mexican state of Quintana Roo. It was created in 1993 when the municipality of Cozumel was split into two, with the mainland section constituting the municipality of Solidaridad. Solidaridad is home to the Maya archaeological sites of Tulum, Xcaret, and Cobá.

As stated above, our business plan is to develop, maintain and manage our Mexico Property. We do not anticipate earning revenues until such time as the Units are constructed on the land adjacent to the Mexico Property and we complete development of the cabanas and reception area thereon. As of the date of this prospectus 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 Mexico 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. We plan to obtain comprehensive liability insurance once we complete development of our Mexico Property.

Investment Policies

Our most significant real estate operation is through our ownership interest in the Mexico Property. We intend to continue to explore ways to increase the value of our Mexico Property and to improve management activities thereon. We may also look for new real estate investment opportunities in hotels, apartments, office buildings and shopping centers in Mexico. The acquisition of any new real estate investments will depend on our ability to find suitable investment opportunities and the availability of sufficient financing to acquire such investments. To help fund any such acquisition, we plans to borrow funds to leverage our investment capital. The amount of this debt will depend on a number of factors including, but not limited to, the availability of financing and the sufficiency of the project's projected cash flows to support the operations and debt service.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, other than as noted in this section:

•	Any of our directors or officers;
•	Any person proposed as a nominee for election as a director;
•	Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
•	Any of our promoters; and
•	Any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons.

We issued 4,000,000 shares of common stock on May 28, 2004 to Mr. Graham Alexander at a price of $0.001 per share, for total proceeds of $4,000. Mr. Alexander is our sole director and our president, secretary and treasurer. These shares were issued pursuant to Section 4(2) of the Securities Act. The 4,000,000 shares of our common stock are restricted shares as defined in the Securities Act. This issuance was made to Mr. Alexander who is a sophisticated individual and as a promoter of our company since our inception was in a position of access to relevant and material information regarding our operations. Other than the issuance of our common stock to Mr. Alexander and our consulting arrangements with him, he has not entered into any agreements with us in which he is to receive from us or provide to us anything of value.

Pursuant to a management consulting agreement dated as of October 1, 2004, between Rancho and Graham G. Alexander, as extended on December 31, 2004, Mr. Alexander agreed to provide certain management consulting services to us as our president in consideration of: (i) a fee of $1,800 per month to December 31, 2004 and at a rate of $800 thereafter; (ii) the issuance of incentive options in such amounts as Rancho may determine at its discretion; and (iii) reimbursement of reasonable travel and promotional expenses incurred by Mr. Alexander in the course of providing his consulting services. The Alexander Consulting Agreement is for a renewable term expiring December 31, 2005, and may be terminated at any time in the event of a material breach as further described in the Alexander Consulting Agreement.

Pursuant to a management consulting agreement dated as of October 1, 2004, between Rancho and Angela Manetta, as extended December 31, 2004, Ms. Manetta agreed to provide certain management consulting services to us as our vice-president in consideration of: (i) a fee of $1,800 per month and at a rate of $200 thereafter; (ii) the issuance of incentive options in such amounts as Rancho may determine at its discretion; and (iii) reimbursement of reasonable travel and promotional expenses incurred by Ms. Manetta in the course of providing her consulting services. The Manetta Consulting Agreement is for a renewable term expiring December 31, 2005, and may be terminated at any time in the event of a material breach as further described in the Manetta Consulting Agreement.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

No Public Market for Common Stock

There is presently no public market for our common stock. We anticipate making an application for trading of our common stock on the OTC Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize.

The Securities Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities' laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation. The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a suitably written statement.

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock if it becomes subject to these penny stock rules. Therefore, if our common stock becomes subject to the penny stock rules, stockholders may have difficulty selling those securities.

Holders of Our Common Stock

As of the date of this prospectus, we have forty three (43) registered stockholders.

Rule 144 Shares

None of the shares of our common stock are currently available for resale under Rule 144 of the Securities Act of 1933.

In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company's common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed the greater of:

1.	One percent of the number of shares of the company's common stock then outstanding, which, in our case, will equal approximately 75,643 shares as of the date of this prospectus; or

2.	The average weekly trading volume of the company's common stock during the four calendar weeks preceding the filing of a notice on form 144 with respect to the sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company.

Under Rule 144(k), a person who is not one of the company's affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. None of the shares of our common stock are presently available to be sold by shareholders in compliance with Rule 144(k).

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth certain information concerning all equity compensation plans previously approved by stockholders and all previous equity compensation plans not previously approved by stockholders, as of the most recently completed fiscal year. In November, 2004, our board of directors approved the 2004 Stock Option Plan (the “Plan”). Under the Plan, options to purchase up to 750,000 shares of our common stock may be granted to our employees, officers, directors, and eligible consultants of our company. The Plan provides that the option price be the fair market value of the stock at the date of grant as determined by the Board of Directors. Options granted become exercisable and expire as determined by the Board of Directors. For a more detailed discussion, please refer to Note 4 to our financial statements attached to this prospectus.

EQUITY COMPENSATION PLAN INFORMATION AS AT NOVEMBER 30, 2004
Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a)	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)	Number of Securities Remaining Available for Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) (c)
Equity Compensation Plans approved by security holders	Nil	N/A	Nil
Equity Compensation Plans not approved by security holders	150,000	$0.50	600,000
Total	150,000	$0.50	600,000

2004 Stock Option Plan

On November 15, 2004, we established our 2004 Stock Option Plan. The purpose of the Plan is to advance the interests of our company and our stockholders by strengthening our ability to obtain and retain the services of the types of employees, consultants, officers and directors who will contribute to our long term success and to provide incentives which are linked directly to increases in stock value which will inure to the benefit of all our stockholders. The Plan is administered by our Board of Directors or by a committee of two or more non-employee directors appointed by the Board of Directors (the "Administrator"). Subject to the provisions of the Plan, the Administrator has full and final authority to grant the awards of stock options and to determine the terms and conditions of the awards and the number of shares to be issued pursuant thereto. Options granted under the Plan may be either "incentive stock options," which qualify for special tax treatment under the Internal Revenue Code of 1986, as amended, (the “Code”) or nonqualified stock options.

All of our employees and members of our Board of Directors are eligible to be granted options. Individuals who have rendered or are expected to render advisory or consulting services to us are also eligible to receive

options. The maximum number of shares of our common stock with respect to which options or rights may be granted under the Plan to any participant is 750,000 shares, subject to certain adjustments to prevent dilution. The aggregate number of shares underlying options granted to any eligible person during any calendar year may not exceed 3% of our issued and outstanding common shares.

The exact terms of the option granted are contained in an option agreement between us and the person to whom such option is granted. Eligible employees are not required to pay anything to receive options. The exercise price for incentive stock options and non-qualified stock options must be no less than 85% of the fair market value of the common stock on the date of grant. An option holder may exercise options from time to time, subject to vesting. Options will vest immediately upon death or disability of a participant and upon certain change of control events.

The Administrator may amend the Plan at any time and in any manner, subject to the following: (1) no recipient of any award may, without his or her consent, be deprived thereof or of any of his or her rights thereunder or with respect thereto as a result of such amendment or termination; and (2) no outstanding stock options may be modified in any manner that would cause such option not to qualify as an incentive stock option for the purposes of Section 422 of the Code.

The Plan terminates on November 15, 2014 unless sooner terminated by action of the Board of Directors. All awards granted under the Plan expire ten years from the date of grant, or such shorter period as is determined by the Administrator. No option is exercisable by any person after such expiration. If an award expires, terminates or is canceled, the shares of our common stock not purchased thereunder shall again be available for issuance under the Plan.

Registration Rights

We have not granted registration rights to the selling stockholders or to any other persons.

We are paying the expenses of the Offering because we seek to: (i) become a reporting company with the SEC under the Exchange Act; and (ii) enable our common stock to be traded on the OTC Bulletin Board. We plan to file a Form 8-A registration statement with the SEC prior to the effectiveness of the Form SB-2 registration statement. The filing of the Form 8-A registration statement will cause us to become a reporting company with the SEC under the Exchange Act concurrently with the effectiveness of the Form SB-2 registration statement. We must be a reporting company under the Exchange Act in order for our common stock to be eligible for trading on the OTC Bulletin Board. We believe that the registration of the resale of shares on behalf of existing stockholders may facilitate the development of a public market in our common stock if our common stock is approved for trading on the OTC Bulletin Board.

We consider that the development of a public market for our common stock will make an investment in our common stock more attractive to future investors. In the near future, in order for us to continue with the development of our business, we will need to raise additional capital. We believe that obtaining reporting company status under the Exchange Act and trading on the OTC Bulletin Board should increase our ability to raise these additional funds from investors.

Dividends

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

1.	We would not be able to pay our debts as they become due in the usual course of business; or

2.	Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

EXECUTIVE COMPENSATION

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the period from our inception through November 30, 2004.

		Annual Compensation				Long Term Compensation
Name and Address of Executive Officers	Titles	Year	Salary	Bonus	Other Annual Compen- sation	Restricted Stock Awarded	Options/ * SARs (#)	LTIP payouts	All Other Compen- sation
Graham G. Alexander 3104 Sunnyhurst Road North Vancouver, BC Canada V7K 2G3	President, Secretary, Treasurer, and Director	2004	$0	$0	$7,900⁽¹⁾⁽²⁾	0	0	$0	$0
Angela Manetta 7119 Halifax Street Burnaby, BC Canada V5A 1M1	Vice President	2004	$0	$0	$7,900⁽²⁾	0	100,000	$0	$0
Cheryl Boegeman 6849 Frederick Avenue Burnaby, BC Canada V5J 3X8	Former Secretary⁽³⁾	2004	$0	$0	$0	0	50,000	$0	$0

Notes:
⁽¹⁾	We do not pay to our director any compensation for serving as a director on our board of directors.
⁽²⁾	Consists of management consulting fees of $1,800 per month paid to each of Mr. Alexander and Ms. Manetta.
⁽³⁾	Ms. Boegeman was appointed as Secretary on October 1, 2004 and resigned as Secretary on January 6, 2005.

Stock Option Grants

The following table sets forth information with respect to stock options granted to each of our directors and officers during our most recent fiscal year ended November 30, 2004:

OPTION / SAR GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)
Name and Address	Number of Securities Underlying Options Granted	% of Total Options Granted to Employees	Exercise Price (per Share)	Expiration Date
Graham G. Alexander 3104 Sunnyhurst Road North Vancouver, BC V7K 2G3	Nil	N/A	N/A	N/A
Angela Manetta 7119 Halifax Street Burnaby, BC V5A 1M1	100,000	66.6%	$0.50	November 18, 2006
Cheryl Boegeman 6849 Frederick Avenue Burnaby, BC V5J 3X8	50,000	33.3%	$0.50	November 18, 2006

We have not granted any stock options since November 30, 2004.

EXERCISES OF STOCK OPTIONS AND YEAR-END OPTION VALUES

The following is a summary of the share purchase options exercised by our officers, directors and employees during the financial year ended November 30, 2004:

AGGREGATED OPTION / SAR EXERCISES DURING THE LAST FINANCIAL YEAR END AND FINANCIAL YEAR END OPTION / SAR VALUES
Name and Address	Common Shares Acquired on Exercise ($)	Value Realized ($)	Unexercised Options at Financial Year-End (#) exercisable / unexercisable	Value of Unexercised In-The- Money Options/SARs at Financial Year-End ($) exercisable / unexercisable
Graham G. Alexander 3104 Sunnyhurst Road North Vancouver, BC V7K 2G3	N/A	N/A	N/A / N/A	N/A / N/A
Angela Manetta 7119 Halifax Street Burnaby, BC V5A 1M1	Nil	N/A	100,000 / Nil	Nil / N/A
Cheryl Boegeman 6849 Frederick Avenue Burnaby, BC V5J 3X8	Nil	N/A	50,000 / Nil	Nil / N/A

FINANCIAL STATEMENTS

Index to Financial Statements:

Audited financial statements as of November 30, 2004, including:

(a)	Report of Independent Registered Public Accounting Firm;

(b)	Balance Sheet as of November 30, 2004;

(e)	Statement of Operations for the period from incorporation on May 28, 2004 to November 30, 2004;

(c)	Statement of Cash Flows for the period from incorporation on May 28, 2004 to November 30, 2004; and

(d)	Statement of Stockholders’ Equity (Deficiency) for the period from incorporation on May 28, 2004 to November 30, 2004;

(f)	Notes to the Financial Statements.

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

FINANCIAL STATEMENTS

NOVEMBER 30, 2004
(Stated in U.S. Dollars)

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Directors of
Rancho Santa Monica Developments Inc.
(A development stage company)

We have audited the balance sheet of Rancho Santa Monica Developments Inc. (a development stage company) as at November 30, 2004 and the statements of operations, cash flows, and stockholders’ equity for the period from incorporation, May 28, 2004, to November 30, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at November 30, 2004 and the results of its operations and its cash flows for the period from incorporation, May 28, 2004, to November 30, 2004 in conformity with United States generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in to Note 1 to the financial statements, the Company has incurred a net loss of $40,107 since inception, has not attained profitable operations and is dependent upon obtaining adequate financing to fulfil its development activities. These factors raise substantial doubt that the Company will be able to continue as a going concern. Management’s plans in regard to these matters are discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Vancouver, Canada	“Morgan & Company”

December 22, 2004	Chartered Accountants

Tel: (604) 687-5841
Fax: (604) 687-0075
www.morgan-cas.com

P.O. Box 10007 Pacific Centre
Suite 1488 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1

F-2

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

BALANCE SHEET

NOVEMBER 30, 2004
(Stated in U.S. Dollars)

ASSETS
Current
Cash	$	43,154
Property (Note 3)		80,000
	$	123,154
LIABILITIES
Current
Accounts payable	$	5,331
Note Payable (Note 4)		50,000
		55,331
STOCKHOLDERS’ EQUITY
Share Capital
Authorized:
100,000,000 common shares with a par value of $0.001 per share
100,000,000 preferred shares with a par value of $0.001 per share
Issued:
7,564,332 common shares		7,564
Additional paid-in capital		103,366
Subscriptions Receivable		(3,000	)
Deficit Accumulated During The Development Stage		(40,107	)
		67,823
	$	123,154

See accompanying notes
F-3

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

STATEMENT OF OPERATIONS

PERIOD FROM INCORPORATION, MAY 28, 2004, TO NOVEMBER 30, 2004
(Stated in U.S. Dollars)

Revenue	$	-
Expenses
Consulting fees		7,200
Professional fees		31,108
General and administrative		1,799
Net Loss For The Period	$	(40,107	)

Basic And Diluted Loss Per Share	$	(0.01	)

Basic And Diluted Weighted Average Number Of Shares Outstanding		3,957,447

See accompanying notes
F-4

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

STATEMENT OF CASH FLOWS

PERIOD FROM INCORPORATION, MAY 28, 2004, TO NOVEMBER 30, 2004
(Stated in U.S. Dollars)

Operating Activities
Net loss for the period	$	(40,107	)

Adjustments To Reconcile Net Loss To Net Cash Used By Operating
Activities
Accounts payable		5,331
		(34,776	)

Investing Activity
Purchase of property		(80,000	)

Financing Activities
Issue of share capital		107,930
Note payable		50,000
		157,930

Increase In Cash And Cash, End Of Period	$	43,154

See accompanying notes
F-5

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

STATEMENT OF STOCKHOLDERS’ EQUITY

PERIOD FROM INCORPORATION, MAY 28, 2004, TO NOVEMBER 30, 2004
(Stated in U.S. Dollars)

										DEFICIT
	COMMON STOCK									ACCUMULATED
	NUMBER OF				ADDITIONAL					DURING THE
	COMMON		PAR		PAID-IN		SUBSCRIPTIONS			DEVELOPMENT
	SHARES		VALUE		CAPITAL		RECEIVABLE			STAGE			TOTAL

Shares issued for cash
at $0.001 per share –
May 28, 2004	4,000,000	$	4,000	$	-	$	-		$	-		$	4,000
Shares issued for cash
at $0.03 per share –
November 30, 2004	3,564,332		3,564		103,366		(3,000	)		-			103,930
Net loss for the period	-		-		-		-			(40,107	)		(40,107	)

Balance, November
30, 2004	7,564,332	$	7,564	$	103,366	$	(3,000	)	$	(40,107	)	$	67,823

See accompanying notes
F-6

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

NOTES TO FINANCIAL STATEMENTS

NOVEMBER 30, 2004
(Stated in U.S. Dollars)

1.	OPERATIONS

	Organization Rancho Santa Monica Developments Inc. was incorporated in the State of Nevada, U.S.A., on May 28, 2004. Development Stage Activities The Company is in the development stage, therefore, recovery of its assets is dependent upon future events, the outcome of which is indeterminable. In addition, successful completion of the Company’s development program and its transition, ultimately to the attainment of profitable operations is dependent upon obtaining adequate financing to fulfil its development activities and achieve a level of revenue adequate to support its cost structure. Going Concern Since inception, the Company has incurred losses and net cash outflows from operations. The Company expects to continue to incur substantial losses to complete the development of its business and acquisition of the land. Since its inception, the Company has funded operations through common stock issuances and debt in order to meet its strategic objectives. The Company plans to continue to fund its operations and to finance the acquisition of the land through common stock issuances and debt. However, there can be no assurance that the Company will be able to obtain sufficient funds to complete the acquisition of the land, and continue the development of and, if successful, to commence the management of the real estate under development. As a result of the foregoing, there exists substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2.	SIGNIFICANT ACCOUNTING POLICIES

	The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.

F-7

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

NOTES TO FINANCIAL STATEMENTS

NOVEMBER 30, 2004
(Stated in U.S. Dollars)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

	a)	Development Stage Company The Company is a development stage company as defined in the Statements of Financial Accounting Standards No. 7. The Company 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 Company’s development stage activities.

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

	c)	Financial Instruments The Company’s financial instruments consist of cash and accounts payable. Unless otherwise noted, it is management’s opinion that this Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximate their carrying values, unless otherwise noted.

	d)	Loss Per Share The Company computes loss per share in accordance with SFAS No. 128 – “Earnings Per Share”. Under the provisions of SFAS No. 128, basic loss per share is computed using the weighted average number of common stock outstanding during the periods. Diluted loss per share is computed using the weighted average number of common and potentially dilative common stock outstanding during the period. As the Company generated net losses in each of the periods presented, the basic and diluted loss per share is the same as any exercise of options or warrants, would anti-dilutive.

F-8

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

NOTES TO FINANCIAL STATEMENTS

NOVEMBER 30, 2004
(Stated in U.S. Dollars)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	e)	Stock Based Compensation The Company 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”.

	f)	Income Taxes The Company has adopted Statement of Financial Accounting Standards No. 109 – “Accounting for Income taxes” (SFAS 109). This standard requires the use of an asset and liability approach for financial accounting, and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

	g)	Impairment of Long-Lived Assets The Company periodically evaluates potential impairments of its long-lived assets, including intangibles. When the Company determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, the Company evaluates the projected undiscounted cash flows related to the assets. If these cash flows are less than the carrying value of the assets, the Company 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.

3.	PROPERTY

	By an agreement, dated November 29, 2004, the Company acquired all the rights and interest in a fraction of a property located in the State of Quinatana Roo, Mexico, for consideration of a $30,000 cash payment ($25,669 paid to November 30, 2004) by December 31, 2004, and a $50,000 unsecured promissory note.

F-9

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

NOTES TO FINANCIAL STATEMENTS

NOVEMBER 30, 2004
(Stated in U.S. Dollars)

3.	PROPERTY (Continued)

	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.

4.	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.

5.	STOCK OPTIONS

The Company’s 2004 stock option plan provides for the grant of incentive stock options, for up to 3% of the issued and outstanding number of common shares of the Company, to employees and directors. Stock options are granted for a term not to exceed ten years from the date of grant and generally vest over a period of five years. During the period ended November 30, 2004, the Company granted 150,000 stock options to two officers of the Company at an exercise price of $0.50 per share until November 18, 2006.

Had the Company determined compensation cost based on the fair value at the grant date of its stock options under FAS 123, the Company’s loss would be the same as the loss reported, as the fair value of the stock options granted is $Nil.

The fair value of the stock options granted was estimated on the grant date using the Black-Scholes option-pricing model assuming no dividend yield, risk-free interest rate of 2.65%, expected volatility of 0%, and expected life of 2 years.

The following table presents information regarding options exercisable at November 30, 2004:

NUMBER		REMAINING	NUMBER
OF		CONTRACTUAL	OF
OPTIONS	EXERCISE	LIFE	OPTIONS
OUTSTANDING	PRICE	(YEARS)	EXERCISABLE

150,000	$ 0.50	1.98	150,000

F-10

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

NOTES TO FINANCIAL STATEMENTS

NOVEMBER 30, 2004
(Stated in U.S. Dollars)

6.	INCOME TAX

	A reconciliation of income tax expense to the amount computed at the statutory rate is as follows:

Loss for the period	$	(40,107	)
Statutory tax rate		35%
Expected income tax provision	$	(14,037	)
Unrecognized tax losses		14,037
	$	-
Significant components of deferred income tax assets are as follows:
Operating loss	$	14,037
Valuation allowance		(14,037	)
	$	-

	The Company has $40,107 in losses carryforward which will expire in 2024 if not utilized.

7.	RELATED PARTIES

On October 1, 2004, the Company entered into management consultant agreements with a director and an officer. Under the terms of the agreements, the Company will pay each individual a fee of $1,800 per month until December 31, 2004. On December 31, 2004, the agreements were extended until December 31, 2005, and the monthly fees were reduced to $800 per month and $200 per month. During the period ended November 30, 2004 an amount of $7,200 is included in the statement of loss for consulting fees pursuant to the agreements.

F-11

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

We have had no changes in or disagreements with our accountants.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form SB-2 under the Securities Act with the SEC with respect to the shares of our common stock offered through this prospectus. This prospectus is filed as a part of that registration statement, but does not contain all of the information contained in the registration statement and exhibits. Statements made in the registration statement are summaries of the material terms of the referenced contracts, agreements or documents of our company. We refer you to our registration statement and each exhibit attached to it for a more detailed description of matters involving our company, and the statements we have made in this prospectus are qualified in their entirety by reference to these additional materials. You may inspect the registration statement, exhibits and schedules filed with the SEC at the Commission's principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The SEC also maintains a website at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. Our registration statement and the referenced exhibits can also be found on this site.

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 24.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our officers and directors are indemnified as provided by the Nevada Revised Statutes (the “NRS”) and our bylaws.

Chapter 78 of the NRS pertaining to private corporations, provides that we are required to indemnify our officers and directors to the extent that they are successful in defending any actions or claims brought against them as a result of serving in that position, including criminal, civil, administrative or investigative actions and actions brought by or on behalf of Rancho.

Chapter 78 of the NRS further provides that we are permitted to indemnify our officers and directors for criminal, civil, administrative or investigative actions brought against them by third parties and for actions brought by or on behalf of Rancho, even if they are unsuccessful in defending that action, if the officer or director:

•	is not found liable for a breach of his or her fiduciary duties as an officer or director or to have engaged in intentional misconduct, fraud or a knowing violation of the law; or

•	acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of Rancho, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was lawful.

However, with respect to actions brought by or on behalf of Rancho against our officers or directors, we may not indemnify our officers or directors where they are adjudged by a court, after the exhaustion of all appeals, to be liable to us or for amounts paid in settlement to Rancho, unless, and only to the extent that, a court determines that the officers or directors are entitled to be indemnified.

Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by the general corporate laws of Nevada, provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers. Our bylaws further provide that we are not required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless:

	(i)	such indemnification is expressly required to be made by law,

	(ii)	the proceeding was authorized by our Board of Directors,

	(iii)	such indemnification is provided by us, in our sole discretion, pursuant to the powers vested in us under the general corporate laws of Nevada, or

	(iv)	such indemnification is required to be made pursuant to our bylaws.

Our bylaws also provide that we are to advance funds to our officers or directors for the payment of expenses incurred in connection with defending a proceeding brought against them in advance of a final disposition of the action, suit or proceeding. However, as a condition of our doing so, the officers or directors to which funds are to be advanced must provide us with undertakings to repay any advanced amounts if it is ultimately determined that they are not entitled to be indemnified for those expenses.

The NRS and our bylaws also allow us to purchase and maintain insurance on behalf of our officers or directors, regardless of whether we have the authority to indemnify them against such liabilities or expenses.

ITEM 25.

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated costs of this Offering are as follows:

Expenses⁽¹⁾	US($)
SEC Registration Fee Accounting fees and expenses Legal fees and expenses Miscellaneous	$17 $5,000 $5,000 $1,000
Total	$11,017

⁽¹⁾All amounts are estimates, other than the SEC's registration fee.

We are paying all expenses of the offering listed above. 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.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

We issued 4,000,000 shares of common stock on May 28, 2004 to Mr. Graham Alexander at a price of $0.001 per share, for total proceeds of $4,000. Mr. Alexander is our sole director and our president, secretary and treasurer. These shares were issued pursuant to Section 4(2) of the Securities Act. The 4,000,000 shares of common stock are restricted shares as defined in the Securities Act. This issuance was made to Mr. Alexander who is a sophisticated individual and as a promoter of our company since our inception, was in a position of access to relevant and material information regarding our operations.

We completed an offering of 3,564,332 shares of our common stock at a price of $0.03 per share to a total of 42 purchasers known to our director on November 30, 2004. The total amount we received from this offering was $106,930. We completed the offering pursuant to Regulation S of the Securities Act. Each purchaser represented to us that they were a non-US person as defined in Regulation S. We did not engage in a distribution of this offering in the United States. Each purchaser represented his intention to acquire the securities for investment only and not with a view toward distribution. Appropriate legends were affixed to the stock certificate issued to each purchaser in accordance with Regulation S. Each investor was given adequate access to sufficient information about us to make an informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.

ITEM 27. EXHIBITS

Exhibit
Number	Description of Exhibits

3.1	Articles of Incorporation.

3.2	Bylaws, as amended.

4.1	Form of Share Certificate.

5.1	Opinion of O’Neill Law Group, P.L.L.C. with consent to use.

10.1	2004 Stock Option Plan.

10.2	Management Consulting Agreement dated October 1, 2004 between Rancho Santa Monica Developments Inc. and Graham G. Alexander.

10.3	Management Consulting Agreement dated October 1, 2004 between Rancho Santa Monica Developments Inc. and Angela Manetta.

10.4	Extension Agreement dated December 31, 2004 between Rancho Santa Monica Developments Inc. and Graham G. Alexander.

10.5	Extension Agreement dated December 31, 2004 between Rancho Santa Monica Developments Inc. and Angela Manetta.

10.6	Purchase Agreement dated for reference November 29, 2004 between Monica Galan-Rios and Rancho Santa Monica Developments Inc.

10.7	Promissory Note dated November 29, 2004 Monica Galan-Rios and Rancho Santa Monica Developments Inc.

23.1	Consent of Morgan & Company, Chartered Accountants.

ITEM 28. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

1.	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(a)	To include any prospectus required by Section 10(a)(3) of the Securities Act;

	(b)	To reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth in this registration statement; provided that any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

	(c)	To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement.

2.	That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3.	To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the Offering.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling person sin connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Vancouver, Province of British Columbia, on January 25, 2005.

	RANCHO SANTA MONICA DEVELOPMENTS INC.

	By:	/s/ Graham G. Alexander
		GRAHAM G. ALEXANDER President and Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.

Signature	Title	Date

	Chief Executive Officer, Chief Financial Officer,	January 25, 2005
/s/ Graham G. Alexander	President, Secretary and Treasurer
	and Director
GRAHAM G. ALEXANDER	(Principal Executive Officer)
	(Principal Accounting Officer)



/s/ Angela Manetta
	Vice President	January 25, 2005
ANGELA MANETTA