UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x Quarterly Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 For the quarterly period ended February 28th, 2009 o Transition Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 For the transition period __________ to ___________ COMMISSION FILE NUMBER 000-51376

FORM 10-Q

(Mark One)

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

For the quarterly period ended May 31^st, 2009

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

For the transition period __________ to ___________

COMMISSION FILE NUMBER 000-51376

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

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

802-610 Granville Street
Vancouver, BC, Canada
V6C-3T3

(Address of principal executive offices)

(604) 689-5661

Issuer's telephone number

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

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

Yes o No x

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of ~~April~~June ~~14th~~ 2nd, 2009, the Issuer had 8,~~376~~886,999 Shares of Common Stock outstanding.

Transitional Small Business Disclosure Format (check one):

Yes o No x

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Certain statements contained in this Form 10-Q constitute ~~FINANCIAL~~"forward-looking ~~STATEMENTS~~statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements, identified by words such as “plan”, "anticipate," "believe," "estimate," "should," "expect" and similar expressions, include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Management's Discussion and Analysis or Plan of Operation" and elsewhere in this Form 10-Q. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (“SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. As used in this interim report, the terms "we", "us", "our", and “our company” mean Rancho Santa Monica Developments, Inc., unless otherwise indicated. All dollar amounts in this annual report are in U.S. dollars unless otherwise stated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

~~Certain~~RANCHO ~~statements~~SANTA ~~contained~~MONICA ~~in this Form 10-Q constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933~~DEVELOPMENTS, ~~as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”)~~INC.Consolidated ~~These statements, identified by words such as~~Balance “plan”, "anticipate," "believe," "estimate," "should," "expect" and similar expressions, include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Management's Discussion and Analysis or Plan of Operation" and elsewhere in this Form 10-Q. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (“SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. As used in this interim report, the terms "we", "us", "our", and “our company” mean Rancho Santa Monica Developments, Inc., unless otherwise indicated. All dollar amounts in this annual report are in U.S. dollars unless otherwise stated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated. Sheets

1ASSETS

RANCHO SANTA MONICA DEVELOPMENTS, INC.

		May 31,		November 30,
		2009		2008
		(Unaudited)
CURRENT ASSETS
Cash	$	24,054	$	4,217
Accounts Receivable, net		91,965		-
Total Current Assets		116,019		4,217
PROPERTY AND EQUIPMENT, NET		292,568		296,414
OTHER ASSETS
Goodwill		477,847		-
Total Other Assets		477,847		-
TOTAL ASSETS	$	886,434	$	300,631

~~FINANCIAL~~LIABILITIES ~~STATEMENTS~~AND STOCKHOLDERS' EQUITY

February 28, 2009

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	29,000		$	19,250
Due to related parties		164,194			103,757
Convertible debt, net		110,625			63,125
Notes payable		50,000			50,000

Total Current Liabilities		353,819			236,132

COMMITMENTS AND CONTINGENCIES		-			-

STOCKHOLDERS' EQUITY
Preferred stock; 100,000,000 shares authorized at $0.0001 par value, no shares issued or outstanding		-			-
Common stock; 100,000,000 shares authorized at $0.0001 par value, 8,866,999 and 7,866,999 shares issued and outstanding, respectively		8,867			7,867
Additional paid-in capital		863,838			364,838
Other comprehensive income		(1,828	)		-
Accumulated deficit		(338,262	)		(308,206	)

Total Stockholders' Equity		532,615			64,499

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	886,434		$	300,631

2The accompanying notes are an integral part of these financial statements.

RANCHO SANTA MONICA DEVELOPMENTS, INC.~~Balance~~Consolidated ~~Sheets~~Statements of Operations (Unaudited)

ASSETS
		For the Three			For the Three			For the Six			For the Six
		February 28,			November 30,
		Months Ended			Months Ended			Months Ended			Months Ended
		2009			2008
		May 31,			May 31,			May 31,			May 31,
		(Unaudited)
		2009			2008			2009			2008
CURRENT ASSETS
REVENUES
Cash	$	7,277		$	4,217
Hotel revenue	$	27,646		$	35,211		$	82,759		$	48,947
Total Current Assets		7,277			4,217
Hosting revenue		222,506			-			424,927			-
PROPERTY AND EQUIPMENT, NET		294,491			296,414
Total Revenue		250,152			35,211			507,686			48,947
TOTAL ASSETS	$	301,768		$	300,631
OPERATING EXPENSES
LIABILITIES AND STOCKHOLDERS' EQUITY
General and administrative		209,217			16,283			445,135			32,725
CURRENT LIABILITIES
Professional fees		31,511			6,763			31,511			11,687
Accounts payable and accrued liabilities	$	20,750		$	19,250
Depreciation expense		1,923			1,924			3,846			4,054
Due to related parties		135,197			103,757
Total Operating Expenses		242,651			24,970			480,492			48,466
Convertible debt, net		66,500			63,125
INCOME (LOSS) FROM OPERATIONS		7,501			10,241			27,194			481
Notes payable		50,000			50,000
OTHER INCOME (EXPENSE)
Total Current Liabilities		272,447			236,132
Interest expense		(52,375	)		(1,500	)		(57,250	)		(3,000	)
COMMITMENTS AND CONTINGENCIES		-			-
Total Other Income (Expense)		(52,375	)		(1,500	)		(57,250	)		(3,000	)
STOCKHOLDERS' EQUITY
LOSS BEFORE INCOME TAXES		(44,874	)		8,741			(30,056	)		(2,519	)
Preferred stock; 100,000,000 shares authorized at $0.0001 par value, no shares issued or outstanding		-			-
PROVISION FOR INCOME TAXES		-			-			-			-
Common stock; 100,000,000 shares authorized at $0.0001 par value, 8,366,999 and 7,866,999 shares issued and outstanding, respectively		8,367			7,867
NET INCOME (LOSS)	$	(44,874	)	$	8,741		$	(30,056	)	$	(2,519	)
Additional paid-in capital		614,338			364,838
CURRENCY TRANSLATION ADJUSTMENT		(381	)		-			(1,828	)		-
Currency translation adjustment		(1,447	)		-
COMPREHENSIVE NET INCOME (LOSS)	$	(45,255	)	$	8,741		$	(31,884	)	$	(2,519	)
Accumulated deficit		(591,937	)		(308,206	)
BASIC INCOME (LOSS) PER SHARE	$	(0.01	)	$	0.00		$	(0.00	)	$	(0.00	)
Total Stockholders' Equity		29,321			64,499
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		8,866,999			7,866,999			8,533,666			7,854,499
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	301,768		$	300,631

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

3RANCHO SANTA MONICA DEVELOPMENTS, INC.Consolidated Statements of Stockholders' Equity

RANCHO SANTA MONICA DEVELOPMENTS, INC.Statements of Operations (Unaudited)

					Additional		Currency
	Common Stock				Paid-In		Translation			Accumulated
	Shares		Amount		Capital		Adjustment			Deficit			Total
Balance, November 30, 2006	7,751,999	$	7,752	$	136,453	$	(1,400	)	$	(113,186	)	$	29,619
Common stock cancelled	-10,000		-10		10		-			-			-
Shares issued for cash at $1.00 per share	75,000		75		74,925		-			-			75,000
Net income for the year ended November 30, 2007	-		-		-		(3,435	)		4,633			1,198
Balance, November 30, 2007	7,816,999		7,817		211,388		(4,835	)		(108,553	)		105,817
Fair value of imbedded conversion feature	-		-		112,500		-			-			112,500
Shares issued for cash at $0.82 per share	50,000		50		40,950		-			-			41,000
Net loss for the year ended November 30, 2008	-		-		-		4,835			(199,653	)		(194,818	)
Balance, November 30, 2008	7,866,999		7,867		364,838		-			(308,206	)		64,499
Stock issued to purchase subsidiary at $0.48 per share (unaudited)	1,000,000		1,000		499,000		-			-			500,000
Net loss for the six months ended May 31, 2009 (unaudited)	-		-		-		(1,828	)		(30,056	)		(31,884	)
Balance, May 31, 2009 (unaudited)	8,866,999	$	8,867	$	863,838	$	(1,828	)	$	(338,262	)	$	532,615

		For the Three		For the Three
		Months Ended		Months Ended
		February 28,		February 29,
		2009		2008
REVENUES	$	55,113		13,736
OPERATING EXPENSES
General and administrative		331,046		16,442
Professional fees		1,000		4,924
Depreciation expense		1,923		2,130
Total Operating Expenses		333,969		23,496
LOSS FROM OPERATIONS		(278,856	)	(9,760	)
OTHER INCOME (EXPENSE)
Interest expense		4,875		1,500
Total Other Income (Expense)		(4,875	)	(1,500	)
LOSS BEFORE INCOME TAXES		(283,731	)	(11,260	)
INCOME TAX EXPENSE		-		-
NET LOSS	$	(283,731	)	(11,260	)
CURRENCY TRANSLATION ADJUSTMENT		(1,447	)	-
COMPREHENSIVE NET INCOME (LOSS)	$	(285,178	)	(11,260	)
BASIC LOSS PER SHARE	$	(0.04	)	(0.00	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		8,116,999		7,866,999

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

~~The~~RANCHO ~~accompanying~~SANTA ~~notes~~MONICA ~~are~~DEVELOPMENTS, anINC.Consolidated ~~integral~~Statements ~~part~~ of Cash ~~these~~Flows ~~financial statements~~(Unaudited)

		For the Six			For the Six
		Months Ended			Months Ended
		May 31,			May 31,
		2009			2008

OPERATING ACTIVITIES
Net income (loss)	$	(30,056	)		(2,519	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		3,846			4,054
Currency translation adjustment		(1,828	)		-
Amortization of imbedded conversion feature		47,500			-
Changes in operating assets and liabilities:
Changes in accounts receivable		(91,965	)		-
Changes in accounts payable and accrued expenses		31,903			20,004

Net Cash Used In/Provided By Operating Activities		(40,600	)		21,539

INVESTING ACTIVITIES
Purchase of property and equipment		-			(140,500	)
Net Cash Used in Investing Activities		-			(140,500	)

FINANCING ACTIVITIES
Proceeds from notes payable		-			105,000
Change in due to related parties		60,437			(8,991	)
Proceeds from common stock issued		-			41,000

Net Cash Provided by Financing Activities		60,437			137,009

NET INCREASE (DECREASE) IN CASH		19,837			18,048
CASH AT BEGINNING OF PERIOD		4,217			493

CASH AT END OF PERIOD	$	24,054			18,541

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:

Interest	$	-		$	-
Income Taxes	$	-		$	-

NON CASH FINANCIING ACTIVITIES

Stock issued for acquisiton of subsidiary	$	500,000		$	-

~~RANCHO~~The ~~SANTA~~accompanying ~~MONICA DEVELOPMENTS,~~notes ~~INC.Statements~~are an integral part of ~~Stockholders'~~these ~~Equity~~financial ~~(Unaudited)~~statements.

Additional Currency
Common Stock Paid-In Translation Accumulated
Shares Amount Capital Adjustment Deficit Total
Balance, November 30, 2006 7,751,999 $ 7,752 $ 136,453 $ (1,400 ) $ (113,186 ) $ 29,619
Common stock cancelled -10,000 -10 10 - - -
Shares issued for cash at $1.00 per share 75,000 75 74,925 - - 75,000
Net income for the year ended November 30, 2007 - - - (3,435 ) 4,633 1,198
Balance, November 30, 2007 7,816,999 7,817 211,388 (4,835 ) (108,553 ) 105,817
Fair value of imbedded conversion feature - - 112,500 - - 112,500
Shares issued for cash at $0.82 per share 50,000 50 40,950 - - 41,000
Net loss for the year ended November 30, 2008 - - - 4,835 (199,653 ) (194,818 )
Balance, November 30, 2008 7,866,999 7,867 364,838 - (308,206 ) 64,499
Common stock issued in failed acquisition at $0.50 per share 500,000 500 249,500 - - 250,000
Net loss for the period ending February 28, 2009 - - - (1,447 ) (283,731 ) (285,178 )
Balance, February 28, 2009 8,366,999 $ 8,367 $ 614,338 $ (1,447 ) $ (591,937 ) $ 29,321
RANCHO SANTA MONICA DEVELOPMENTS, INC.

Notes to the Consolidated Financial Statements
May 31, 2009 and November 30, 2008

~~The~~NOTE ~~accompanying~~1 – CONDENSED ~~notes~~FINANCIAL ~~are~~STATEMENTS ~~an integral part of these financial statements.~~

5 The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at May 31, 2009, and for all periods presented herein, have been made.

~~RANCHO~~Certain ~~SANTA~~information ~~MONICA~~and ~~DEVELOPMENTS~~footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s November 30, ~~INC~~2008 audited financial statements.~~Statements~~ The results of ~~Cash~~ ~~Flows~~operations ~~(Unaudited)~~for the periods ended May 31, 2009 and May 31, 2008 are not necessarily indicative of the operating results for the full years.

		For the Three			For the Three
		Months Ended			Months Ended
		February 28,			February 29,
		2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(283,731	)		(11,260	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		1,923			2,130
Currency translation adjustment		(1,447	)		-
Amortization of imbedded conversion feature		3,375			-
Common stock issued in failed acquisition		250,000			-
Changes in operating assets and liabilities:
Change in due to related parties		31,440			-
Changes in accounts payable and accrued expenses		1,500			2,000
Net Cash Used by Operating Activities		3,060			(7,130	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		-			-
Proceeds from common stock issued		-			41,000
Net Cash Provided by Financing Activities		-			41,000
NET INCREASE (DECREASE) IN CASH		3,060			33,870
CASH AT BEGINNING OF PERIOD		4,217			493
CASH AT END OF PERIOD	$	7,277			34,363
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest	$	-		$	-
Income Taxes	$	-		$	-

NOTE 2 – GOING CONCERN

The ~~accompanying~~Company’s ~~notes~~financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ~~integral~~ongoing ~~part~~source of ~~these~~revenues ~~financial statements~~sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

6In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

~~RANCHO~~The ~~SANTA~~ability ~~MONICA~~of ~~DEVELOPMENTS,~~the ~~INC.~~Company ~~Notes~~to continue as a going concern is dependent upon its ability to successfully accomplish the ~~Condensed~~ ~~Financial~~plans ~~Statements~~described ~~February~~in ~~28,~~the ~~2009~~preceding paragraph and ~~November~~eventually ~~30,~~secure ~~2008~~other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 13 – -SIGNIFICANT ~~CONDENSED~~ACCOUNTING ~~FINANCIAL STATEMENTS~~ POLICIES

~~The~~Use ~~accompanying financial statements have been prepared by the Company without audit. In the opinion~~ of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at February 28, 2009, and for all periods presented herein, have been made. Estimates

~~Certain~~The ~~information~~preparation ~~and~~of ~~footnote disclosures normally included in~~ financial statements ~~prepared~~ in ~~accordance~~conformity with accounting principles generally accepted in the United States of America ~~have~~requires ~~been~~management ~~condensed~~to ~~or omitted.~~make Itestimates isand ~~suggested~~assumptions that ~~these~~affect ~~condensed~~the ~~financial~~reported ~~statements~~amounts beof ~~read~~assets ~~in conjunction with the financial statements~~ and ~~notes~~liabilities ~~thereto~~at ~~included in~~ the ~~Company’s~~ ~~November~~date ~~30,~~of ~~2008~~the ~~audited~~ financial statements. ~~The~~and ~~results of operations for~~ the ~~periods~~reported ~~ended~~amounts ~~February~~of ~~28,~~revenue ~~2009~~ and ~~February~~expenses ~~29,~~during ~~2008~~the ~~are~~reporting ~~not necessarily~~period. ~~indicative~~Actual ~~of the operating~~ results ~~for~~could ~~the~~differ ~~full~~from ~~years.~~those estimates.

~~NOTE~~Recent 2Accounting ~~- GOING CONCERN~~ Pronouncements

~~The~~In ~~Company’s~~April ~~financial~~2009, ~~statements~~the ~~are~~FASB ~~prepared~~issued ~~using~~FSP ~~generally accepted~~No. ~~accounting~~FAS ~~principles~~157-4, in“Determining ~~the~~Fair ~~United~~Value ~~States~~When ofthe ~~America~~Volume ~~applicable~~and toLevel ~~a going~~of ~~concern~~Activity ~~which~~for ~~contemplates~~ the ~~realization~~Asset ofor ~~assets~~Liability Have Significantly Decreased and ~~liquidation~~Identifying ~~of liabilities~~Transactions inThat ~~the~~Are ~~normal~~Not ~~course~~Orderly” of(“FSP ~~business~~FAS 157-4”). FSP ~~The~~FAS ~~Company~~157-4 ~~has~~provides ~~not~~guidance ~~yet established~~on anestimating ~~ongoing~~fair ~~source~~value ofwhen ~~revenues~~market ~~sufficient~~activity tohas ~~cover~~decreased ~~its~~and ~~operating costs~~on ~~and~~identifying ~~allow~~transactions itthat toare ~~continue~~not asorderly. Additionally, aentities ~~going~~are ~~concern.~~required ~~The~~to ~~ability~~disclose ofin interim and annual periods the ~~Company~~inputs and valuation techniques used to ~~continue~~ asmeasure afair ~~going~~value. This ~~concern~~FSP is ~~dependent~~effective onfor ~~the~~interim ~~Company~~and ~~obtaining~~annual ~~adequate capital~~periods toending ~~fund~~after ~~operating~~June ~~losses~~15, ~~until~~2009. The itCompany ~~becomes~~does ~~profitable.~~not Ifexpect the ~~Company~~adoption ~~is unable~~of toFSP ~~obtain~~FAS ~~adequate~~157-4 ~~capital,~~will ithave ~~could~~a bematerial ~~forced~~impact toon ~~cease~~its ~~operations.~~financial condition or results of operation.

InRANCHO ~~order~~SANTA toMONICA ~~continue as a going concern~~DEVELOPMENTS, ~~the Company will need, among other things, additional capital resources~~INC. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

Notes to the Consolidated Financial Statements
May 31, 2009 and November 30, 2008

~~The ability of the Company to continue as a going concern is~~ ~~dependent~~NOTE ~~upon~~3 ~~its~~– ~~ability~~SIGNIFICANT toACCOUNTING ~~successfully~~POLICIES accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. (CONTINUED)

~~NOTE~~Recent 3Accounting –Pronouncements ~~SIGNIFICANT ACCOUNTING POLICIES~~ (continued)

~~Use~~In October 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of ~~Estimates~~a Financial Asset When the Market for That Asset is Not Active,” (“FSP FAS 157-3”), which clarifies application of SFAS 157 in a market that is not active. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FSP FAS 157-3 had no impact on the Company’s results of operations, financial condition or cash flows.

~~The~~In ~~preparation~~December of2008, ~~financial~~the ~~statements~~FASB inissued ~~conformity~~FSP ~~with accounting~~No. ~~principles~~FAS ~~generally~~140-4 ~~accepted~~and inFIN ~~the~~46(R)-8, ~~United~~“Disclosures ~~States~~by ofPublic ~~America requires~~Entities ~~management~~(Enterprises) toabout ~~make~~Transfers ~~estimates~~of ~~and~~Financial ~~assumptions~~Assets ~~that~~and ~~affect~~Interests ~~the~~in ~~reported amounts~~Variable ofInterest ~~assets~~Entities.” This ~~and~~disclosure-only ~~liabilities~~FSP atimproves the ~~date~~transparency of ~~the~~transfers of financial ~~statements~~assets and ~~the~~ ~~reported~~an ~~amounts~~enterprise’s ofinvolvement ~~revenue~~with ~~and~~variable ~~expenses~~interest ~~during~~entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. The ~~Actual results~~Company ~~could~~adopted ~~differ~~this ~~from~~FSP ~~those~~effective ~~estimates~~January 1, 2009. The adoption of the FSP had no impact on the Company’s results of operations, financial condition or cash flows.

~~Recent~~In ~~Accounting~~December ~~Pronouncements~~2008, the FASB issued FSP No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 requires additional fair value disclosures about employers’ pension and postretirement benefit plan assets consistent with guidance contained in SFAS 157. Specifically, employers will be required to disclose information about how investment allocation decisions are made, the fair value of each major category of plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This FSP is effective for fiscal years ending after December 15, 2009. The Company does not expect the adoption of FSP FAS 132(R)-1 will have a material impact on its financial condition or results of operation.

In ~~June~~September 2008, the FASB issued ~~FASB~~exposure ~~Staff~~drafts ~~Position~~that ~~EITF~~eliminate ~~03-6-1, Determining~~qualifying ~~Whether~~special ~~Instruments~~purpose ~~Granted~~entities infrom ~~Share-Based~~the ~~Payment~~guidance ~~Transactions Are~~of ~~Participating~~SFAS ~~Securities~~No. 140, (“~~FSP~~Accounting ~~EITF~~for ~~03-6-1”).~~Transfers ~~FSP~~and ~~EITF~~Servicing ~~03-6-1~~of ~~addresses whether~~Financial Assets ~~instruments~~and Extinguishments ~~granted~~of ~~in share-based payment transactions are participating securities prior to vesting~~Liabilities,” and FASB Interpretation ~~therefore~~46 ~~need~~(revised toDecember be2003), ~~included~~“Consolidation ~~in the computation~~ of Variable Interest ~~earnings~~Entities − ~~per~~an ~~share~~interpretation ~~under the two-class method as described in FASB Statement~~ of ~~Financial Accounting Standards~~ ARB No. ~~128~~51, ~~“Earnings per Share.~~” ~~FSP~~ ~~EITF~~as ~~03-6-1~~well isas ~~effective~~other ~~for~~modifications. While ~~financial~~the ~~statements~~proposed ~~issued~~revised ~~for~~pronouncements ~~fiscal~~have ~~years beginning~~not onbeen orfinalized ~~after December 15, 2008~~ and ~~earlier~~the ~~adoption~~proposals ~~is prohibited. We~~ are ~~not~~subject ~~required~~ to ~~adopt~~further ~~FSP~~public ~~EITF~~comment, ~~03-6-1;~~the ~~neither~~Company doanticipates wethe ~~believe~~changes ~~that~~will ~~FSP~~not ~~EITF 03-6-1 would~~ have ~~material~~a ~~effect~~significant impact on ~~our~~the ~~consolidated~~Company’s financial ~~position~~statements. The ~~and~~changes ~~results~~would ofbe ~~operations~~effective ifMarch ~~adopted.~~1, 2010, on a prospective basis.

7 NOTE 4 – SIGNIFICANT EVENTS

InOn ~~May~~December ~~2008~~1, 2008 the ~~Financial~~Company, ~~Accounting~~entered ~~Standards~~into ~~Board~~an ~~(“FASB”)~~Agreement ~~issued~~to ~~SFAS~~purchase ~~No. 163,~~all ~~“Accounting~~of ~~for~~the ~~Financial~~outstanding ~~Guarantee~~shares ~~Insurance Contracts-and interpretation~~ of ~~FASB~~AptHost ~~Statement~~Communications ~~No.~~USA 60Ltd (“Apthost”.) ~~SFAS~~whereby ~~No.~~the ~~163~~Company ~~clarifies~~would ~~how Statement~~issue 601,000,000 ~~applies~~shares toof ~~financial~~its ~~guarantee~~common ~~insurance~~stock ~~contracts~~for 500,000 ~~including~~shares of the ~~recognition~~ ~~and~~common ~~measurement~~stock of ~~premium~~AptHost ~~revenue~~representing ~~and~~all ~~claims~~the ~~liabilities.~~outstanding ~~This statement~~shares ~~also~~of ~~requires expanded disclosures about financial guarantee insurance contracts~~AptHost. ~~SFAS~~The ~~No.~~shares ~~163~~were isissued ~~effective~~to ~~for~~three ~~fiscal~~shareholders ~~years~~of ~~beginning~~AptHost onconsisting orof ~~after December~~Brian 15French, ~~2008~~Cody McLain, and ~~interim~~Josuee ~~periods~~Shang ~~within~~Ortiz ~~those~~(the ~~years~~“Shareholders’). ~~SFAS~~The ~~No.~~Shareholders ~~163~~in ~~has~~addition ~~no effect~~signed onnon-compete agreements with the Company’s. ~~financial~~The ~~position,~~shares ~~statements~~are ofsubject ~~operations,~~to ora ~~cash flows~~two atyear ~~this~~lock-up ~~time.~~period as per the Agreement.

InDue ~~May~~to ~~2008,~~pending ~~the~~litigation ~~Financial~~between ~~Accounting~~the ~~Standards~~two ~~Board~~parties ~~(“FASB”)~~over ~~issued~~certain ~~SFAS~~aspects ~~No. 162, “The Hierarchy~~ of ~~Generally~~the ~~Accepted~~purchase ~~Accounting~~and ~~Principles”.~~the ~~SFAS No.~~resulting ~~162~~uncertainty ~~sets~~of ~~forth~~ the ~~level~~acquisition, ofresults ~~authority~~for toAptHost awere ~~given~~not ~~accounting~~included ~~pronouncement~~in ~~or document~~the byCompany’s ~~category.~~filing ~~Where~~for ~~there~~the ~~might~~period beending ~~conflicting~~February ~~guidance between two categories~~28, 2009. During the ~~more~~period ~~authoritative~~ended ~~category~~May ~~will~~31, ~~prevail.~~2009, ~~SFAS~~all ~~No.~~disputes ~~162~~were ~~will become~~resolved ~~effective~~and 60the ~~days~~purchase ~~after~~was ~~the~~finalized. These ~~SEC~~financial ~~approves~~statements report the ~~PCAOB’s~~consolidated ~~amendments~~results toof ~~AU Section~~both ~~411~~companies as of ~~the~~December ~~AICPA~~1, ~~Professional Standards~~2008. The ~~SFAS~~Company ~~No.~~will ~~162~~file ~~has~~an noamended ~~effect~~10Q on for the ~~Company’s~~period ~~financial~~ended ~~position,~~February ~~statements of operations~~28, or2009 ~~cash~~to ~~flows~~reflect at this ~~time~~change.

~~NOTE~~ITEM 32. –MANAGEMENT'S ~~SIGNIFICANT~~DISCUSSION ~~ACCOUNTING~~AND ~~POLICIES~~ANALYSIS OR PLAN OF OPERATION.

InCautionary ~~December~~Statement ~~2008,~~Regarding ~~the~~Forward-Looking ~~Company issued 500,000 shares of its common stock in a~~Statements ~~failed acquisition. The Company is seeking the return of the shares for cancellation. The shares were valued at $0.50 per share.~~

8This quarterly report contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

~~ITEM~~Although 2we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited interim financial statements are stated in United ~~MANAGEMENT'S~~States ~~DISCUSSION~~dollars ~~AND~~and ~~ANALYSIS~~are ORprepared ~~PLAN~~in OFaccordance ~~OPERATION~~with United States generally accepted accounting principles. The following discussion should be read in conjunction with our unaudited interim financial statements and the related notes that appear elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all ~~Cautionary~~references ~~Statement~~to ~~Regarding~~"common ~~Forward-Looking~~shares" ~~Statements~~refer to common shares in the capital of our company and the terms "we", "us" and "our" mean Rancho Santa Monica Developments, Inc. and it’s wholly owned subsidiaries.

~~This~~Corporate ~~quarterly~~Background report contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Our company currently owns and operates a specialized web ~~Although~~hosting wecompany, ~~believe~~AptHost ~~that~~Communications ~~the~~USA ~~expectations~~Inc. ~~reflected~~(“AptHost”) in(www.apthost.com). ~~the~~Our ~~forward-looking~~client ~~statements~~base ~~are~~exceeds ~~reasonable~~3,000 weclients and ~~cannot~~estimated ~~guarantee~~annual ~~future~~sales ~~results~~are over $700,000 ~~levels~~with an average of ~~activity,~~two ~~performance~~hundred ornew signups ~~achievements~~a month. ~~Except~~To asservice ~~required~~our bygrowing ~~applicable~~client ~~law~~base, ~~including~~we ~~the~~have ~~securities~~over 150 dedicated ~~laws~~servers ofand ~~the~~33 ~~United~~Virtual ~~States~~Private Servers, weReseller, doand ~~not~~Semi-Dedicated ~~intend~~Servers. toWe primarily ~~update~~host ~~any~~clients ofwho ~~the~~require ~~forward-looking~~FFMPEG ~~statements~~codex, toa ~~conform~~computer ~~these~~program ~~statements~~that tocan record, ~~actual~~convert ~~results.~~and stream digital audio and video in numerous formats.

~~Our~~In ~~unaudited~~addition ~~interim~~to ~~financial~~our ~~statements~~AptHost ~~are~~operation, ~~stated~~we own a resort property in ~~United~~Tulum, ~~States~~Mexico. ~~dollars~~The ~~and~~resort, ~~are~~named ~~prepared~~Hotel inParaYso, ~~accordance~~is ~~with~~an ~~United~~ocean ~~States~~front ~~generally~~property hotel ~~accepted~~located ~~accounting~~on ~~principles~~the Caribbean beaches of Tulum, Quintana Roo, Mexico. ~~The~~Our Company ~~following~~owns ~~discussion~~a ~~should~~resort beproperty ~~read~~and in ~~conjunction~~addition ~~with~~to ~~our~~the ~~unaudited~~management of its ~~interim~~operations, ~~financial~~has ~~statements~~constructed certain facilities and ~~the~~provides ~~related~~management ~~notes~~services for ~~that~~the ~~appear~~apartment ~~elsewhere~~units inconstructed ~~this~~on ~~quarterly~~the ~~report.~~adjoining property.

InRecent ~~this~~Corporate ~~quarterly report, unless otherwise specified, all references to "common shares" refer to common shares in the capital of our company and the terms "we", "us" and "our" mean Rancho Santa Monica~~ Developments, ~~Inc. and it’s wholly owned subsidiaries.~~

~~Corporate~~We ~~Background~~experienced the following significant developments through May 31st , 2009:

We1. ~~are~~On aMay ~~development~~8th, ~~company~~2009, ~~focused~~entered oninto a settlement agreement with the ~~development~~shareholders of ~~real~~AptHost ~~estate.~~whereby Wewe ~~own~~issued aan ~~resort~~additional ~~property~~500,000 inshares ~~Tulum~~of ~~Mexico~~common ~~and~~stock ~~have~~(for ~~constructed~~cumulative ~~certain~~sum ~~facilities~~of ~~and~~1,000,000 ~~provide~~shares) ~~management~~in ~~services~~Rancho ~~for~~to the ~~apartment~~former ~~units~~shareholders ~~constructed~~of onAptHost. ~~the~~2. ~~adjoining~~On ~~property. The~~May ~~resort~~8th, is2009 anCody ~~ocean~~McLain ~~front~~was ~~property~~appointed ~~hotel~~as ~~located~~President onand ~~the~~Director ~~Caribbean~~of ~~beaches~~AptHost and Joshuee Shang Ortiz as Officer and Director of ~~Tulum~~AptHost. 3. On May 8th, ~~Quintana~~2009 ~~Roo~~US Nevada Southern District Court case 0902-224 was dismissed with prejudice. 4. On May 15th, ~~Mexico~~2009 Joshue Shang Ortiz resigned as an Officer and ~~the~~Director ~~resort~~of isAptHost. ~~named~~5. ~~Hotel~~On ~~ParaYso~~May 29th, ~~Tulum~~2009, ~~Mexico~~SoftLayer Technologies Inc. was dismissed with prejudice.

~~Recent~~2.1 ~~Corporate~~AptHost ~~Developments~~Communications USA Inc. (www.apthost.com)

We2.1.1 ~~experienced~~Summary ~~the following significant developments since February 28th , 2009:~~

WeFounded ~~entered~~in ~~into~~2000 anand ~~Agreement~~based ~~with~~in Seattle, WA, AptHost ~~Communications~~provides domain ~~USA~~registration ~~Inc.~~and ~~(“AptHost”)~~web tohosting ~~acquire~~services, ~~all~~worldwide. ~~their~~This ~~outstanding~~segment ~~shares~~of inour company ~~exchange~~currently ~~for~~has 1sales totaling over $52,000~~,000~~ ~~shares~~per inmonth ~~the~~and ~~Company~~hosts ~~consisting~~3,000+ clients ofand ~~500~~services 18,000+ ~~tranches~~domains. AptHost.com plans to focus on the following markets:

2.1 Hotel ParaYso Resort, Tulum, Quintana Roo, Mexico

	(1)	FFMPEG Hosting for Shared, Reseller, VPS, Semi-Dedicated and Dedicated Servers
	(2)	Management Service for Dedicated Servers
	(3)	Domain registration and management
	(4)	Digital streaming solutions
	(5)	Security products

WeOur ~~own~~company ~~property~~was (the ~~“Solidaridad~~first ~~Property”)~~company in ~~Tulum,~~the ~~Mexico~~world asto ~~noted~~bring shared inFFMPEG ~~Figure~~hosting 1.to ~~The~~the ~~property~~web ~~consists~~hosting ofmarket. ~~two~~AptHost’s ~~developable~~customer ~~pods~~base includes ~~where~~personal weuse ~~can~~consumers ~~build~~as anwell ~~additional~~as 15business ~~hotel suites~~customers. ~~The~~Our ~~hotel has been open since February 7th,~~business ~~2007.~~clients Wespan ~~also~~all ~~manage~~types ~~the adjoining 11 hotel suites and receive income from the supply~~ of ~~management services. The Company entered into an agreement dated for reference November 29~~businesses, ~~2005~~including ~~with Monica Galan~~start-~~Rios~~ups. ~~for~~Bringing ~~the~~FFMPEG ~~purchase~~Video hosting ofto ~~certain~~a ~~lands located~~shared inhosting ~~Solidaridad,~~market ~~Mexico~~has ~~consisting~~sparked ofa ~~approximately~~major ~~1,220~~industry ~~square meters~~boom, ~~See~~making ~~Figure~~it affordable 1for ~~below.~~virtually ~~Under~~anyone ~~the~~to ~~terms~~have oftheir ~~the~~own ~~property~~video ~~purchase agreement with Ms~~website. ~~Galan-Rios:~~

9Projected revenues at the company’s current growth rate for 2009, is $794,000. To date, the company has not sought any initial investment and has been cash flow positive since March 2007.

(1)	In consideration of Ms. Galan-Rios’s grant of all of her interests in the Solidaridad Property to us, we: (i) paid $30,000 to Ms. Galan-Rios, and (ii) issued an unsecured promissory note to Ms. Galan- Rios in the amount of $50,000, plus accrued interest at a rate of 12% per year, maturing on November 29, 2006;
(2)	We agreed to provide septic and water services to tenants at a rate of $50 per apartment unit per month;
(3)	We agreed that commencing on the completion of construction of the units, for a 25 year period following November 29, 2004, we will provide security, maintenance and gardening services for the Solidaridad Property for a fee of $250 per unit per month; and
(4)	We agreed to grant to Ms. Galan-Rios and any of the potential tenants, access to the road presently existing on the Solidaridad Property.
2.1.1 Location of Hotel ParaYso Resort, Tulum, Quintana Roo, Mexico

Mission

The ~~property~~mission ~~consists~~ of ~~the~~AptHost.com ~~Western~~provides ~~half of the fraction of Lot #10 located at Km 8, Carretara~~ a ~~Tulum-Boca~~complete ~~Paila~~hosting ~~Ejido Jose Maria Pino Suarez Municipality of Solidaridad, Quintana Roo, Mexico in the city of Tulum, Mexico. See Figure 1 below.~~solution ~~Solidaridad~~designed isto ~~one~~meet of the ~~eight~~growing ~~municipalities~~demands ~~that make up the Mexican state~~ of ~~Quintana Roo. Quintana Roo is located on~~ the ~~eastern~~video ~~part~~hosting ~~of the Yucatán Peninsula~~market. It ~~borders~~aims ~~the~~to service ~~Mexican~~a ~~states~~wide range of ~~Yucatán~~clients and ~~Campeche~~ to ~~the~~make ~~north and~~FFMPEG ~~west,~~video ~~the~~hosting ~~Caribbean~~affordable ~~Sea~~for anyone toin ~~the~~need ~~east, and the nation~~ of ~~Belize~~a tohigh ~~the~~quality ~~south~~video website.

10AptHost.com has established a reputation for quality service at an affordable price and plans to enhance its image in the industry as a top solution provider. The company is also a developer of advanced software applications that cater to the various market niches that offer vertical growth opportunities. Below are a few of the opportunities our company has already identified as targets to expand services to sub-markets within the web hosting industry:

~~2.2~~Social ~~AptHost~~Media/Video ~~Communications USA, Inc. Web Hosting~~ Sharing
~~The~~Tomacat ~~Company~~Hosting ~~acquired all the outstanding shares of AptHost~~ Communications USA Inc. inexchange for 1,000,000 shares of the Company. AptHost provides web hosting services to over 2,000 clients and specializes in video hosting. Total annual revenues through to November 30th, 2008 were $443,473.48 as provided by the former officers of AptHost. The Company is currently in litigation as noted in Part II Item 1 with the former officers of AptHost to obtain exclusive access to its servers and day-to-day operations.
~~2.3~~Joomla ~~PLAN OF OPERATION~~Hosting
~~Our~~Managed ~~plan~~Hosting ofAutomation ~~operation~~Tools is to acquire, manage, and develop income-producing real property in Mexico, Canada and the United States. Our ParaYso Hotel in Tulum Mexico currently produces income and has been in operations since February 7th, 2007.

~~MILESTONES~~Products ~~AND~~and ~~OBJECTIVES~~Services

AptHost.com currently provides Shared, Reseller, Virtual Private Servers, Semi-Dedicated and Dedicated Hosting solutions. The ~~table~~company currently ~~below~~hosts ~~highlights~~approximately ~~our~~18,000 ~~milestones~~domains on its shared servers alone. Additionally, the company hosts and ~~objectives~~manages over 85 dedicated servers which have ~~the~~an ~~next~~unknown ~~twelve~~number ~~months:~~of domains.

MILESTONES AND OBJECTIVES	ANTICIPATED COST	TIME FRAME
PHASE I – FIND NEW REVENUE GENERATING STREAMS FROM	$5,000	1 Month
THE SOLIDARIDAD PROPERTY
PHASE II – AQUIRING OTHER DEVELOPMENT OR INCOME	$50,000	3 Months
PRODUCING PROPERTIES IN CANADA OR UNITED STATES
- Visit areas in Canada and the United States reviewing real estate development opportunities
- Negotiate purchase of lands
- Cash deposit required to secure potential land parcels
PHASE III – AQUIRING OTHER DEVELOPMENT OR INCOME	$50,000	12 Months
PRODUCING PROPERTIES IN MEXICO
- Visit other resort areas in Mexico to review real estate development opportunities
- Negotiate purchase of lands
- Cash deposit required to secure potential land parcels
TOTAL	$105,000	-

AptHost feels that the FFMPEG market segment has largely been over looked by the larger hosting companies because of the amount of "specialty support" required by this segment. AptHost.com has overcome this by developing proprietary software that enables us to provide faster support with less staff. We have through this software managed to keep our staffing levels down and maintain higher quality of support at the same time.

11With current Staff, hardware and facilities, the company can do the following:

WeProvide ~~anticipate~~shared ~~spending~~hosting ~~approximately~~for ~~$105~~over 3,000 inclients the next 12 months in pursuing our plan of operations Currently, we have cash of $7,277 which is insufficient to allow us to meet our current commitments and to complete our plan of operation for the next twelve months. We are will need substantial additional financing in order to implement our long term business strategy and plan of operation. We anticipate that any additional financing will likely be in the form of equity financing as substantial debt financing is not expected to be available at this stage of our business.
~~Our~~Provide ~~actual~~VPS ~~expenditures~~Hosting ~~and~~for ~~business~~150+ ~~plan~~clients ~~may differ from the one stated above. Our Board of Directors may decide not to pursue this plan. In addition, we may modify the plan based on available financing.~~
InDesign ~~addition~~and tobuild ~~the~~database ~~costs~~driven ~~outlined~~web ~~above,~~solutions ~~we anticipate that we will incur over the next twelve months the following expenses:~~

	Planned Expenditures Over
Category	The Next Twelve Months
Professional Fees	$10,000
General Administrative Expenses	$25,000
Consulting Fees	$10,000
Contractor Fees	$10,200
TOTAL	$55,000

Provide Managed Dedicated Server solutions to 500+ customers
~~Our~~Offer ~~total~~domain ~~expenditures~~registration ~~over~~services ~~the next twelve months are anticipated to be approximately $160,000.~~
~~LIQUIDITY~~Offer ~~AND~~SSL ~~CAPITAL~~certificates ~~RESOURCES~~

AsResults of ~~April~~Operations 14th, 2009 we had cash on hand of $2,456. Since our inception, we have used our common stock to raise money for our operations and for our property acquisitions. We are currently under operations for our Solidaridad Property.

WeRevenue ~~anticipate~~for ~~continuing~~the tothree ~~rely~~months onended ~~equity~~May ~~sales~~31, of2009 ~~our~~increased ~~common~~610% ~~stock~~over inthe ~~order~~same toperiod ~~continue~~ended toMay ~~fund~~31, ~~our~~2008 ~~business~~due ~~operations.~~to ~~Issuances~~the acquisition of ~~additional~~ ~~shares~~AptHost ~~will~~which contributed ~~result~~over $222,000 in ~~dilution~~revenue toduring ~~our~~the ~~existing stockholders~~period. ~~There~~During isthe six months noended ~~assurance~~May ~~that~~31, we2009 ~~will~~revenue ~~achieve~~increased ~~any~~by of937% ~~additional~~over ~~sales~~the ofsame ~~our~~period ~~equity securities~~ended orMay ~~arrange~~31, 2008 ~~for~~again ~~debt~~due orto ~~other~~the ~~financing~~exceptional ~~for~~performance toof ~~fund~~AptHost. ~~our~~During ~~planned~~this period, ~~business~~AptHost ~~activities~~contributed an additional $424,927 in revenue.

~~OFF-BALANCE~~Below ~~SHEET~~is ~~ARRANGEMENTS~~a graphical summary of Revenue for 2008 and 2009 to date respectively:

WeDuring ~~have~~the nothree ~~significant~~months ~~off-balance~~and ~~sheet~~six ~~arrangements~~months ~~that~~ended ~~have~~May 31, 2009 the orCompany ~~are~~saw ~~reasonably~~total ~~likely~~operating toexpenses ~~have~~increase aby ~~current~~872% orand ~~future~~891% ~~effect~~over onthe ~~our~~same periods ~~financial~~ended May 31, 2008, respectively. This increase is related to the ~~condition~~acquisition and operation of AptHost. The company spent over $30,000 ~~changes~~in litigation costs related to malicious code imbedded by since terminated employees. This accounted for 127% of the change in ~~financial~~total ~~condition~~operating expenses for the three months ended May 31, ~~revenues~~2009. orBoth segments of the Company have seen general and administrative expenses, ~~results~~decline as a percentage of revenue over the ~~operations,~~last ~~liquidity,~~two ~~capital~~fiscal ~~expenditures~~quarters. orThe ~~capital~~Company ~~resources~~attributes this to the finalization of the merger and expects this trend to continue as management and employees are able to focus on building each segment of the business.

~~CRITICAL~~Interest ~~ACCOUNTING~~expense ~~POLICIES~~increased dramatically over the three and six month periods ended May 31, 2009 due to expenses related to the amortization of a beneficial conversion feature of its convertible debt. This convertible feature is being amortized the year of the conversion window which ends during the reporting period ended August 31, 2009. Without this non cash amortization of the conversion feature, revenues for the three and six month periods ended May 31, 2009 and 2008 would have improved from losses of $44,874 and $30,056 to income of $6,181 and $24,194.

~~The~~Over ~~financial~~the ~~statements~~last ~~presented~~two ~~with~~months ~~this~~May ~~quarterly~~and ~~report~~June, AptHost has gone onthrough ~~Form~~a ~~10-Q~~litigation ~~have~~process ~~been~~involving ~~prepared~~the indiscovery ~~accordance~~of ~~with~~malicious ~~generally~~code ~~accepted~~on ~~accounting~~its ~~principles~~servers inand ~~the~~network. ~~United~~The ~~States~~code ofhas ~~America~~since ~~for~~been ~~interim~~removed ~~financial~~and ~~information. These~~involving ~~financial~~employees ~~statements~~are no dolonger ~~not~~with ~~include~~the ~~all~~company. ~~information~~AptHost ~~and~~has ~~footnote disclosures~~since ~~required~~moved ~~for~~to ana ~~annual~~new ~~set~~datacenter ofto fulfill ~~financial~~its ~~statements~~customer ~~prepared~~needs ~~under United~~for ~~States~~better ~~generally~~service ~~accepted accounting~~and ~~principles~~uptime. In ~~the~~As ~~opinion~~a ofresult, ~~our~~the Company ~~management,~~can ~~all~~now ~~adjustments~~report ~~(consisting~~its ~~solely~~services ofhave ~~normal~~been ~~recurring~~expanded ~~accruals)~~to ~~considered~~offer ~~necessary~~24/7 ~~for~~online support aand ~~fair~~an ~~presentation~~upgrade of ~~the~~its ~~financial~~Hosting ~~position,~~Services ~~results~~with ofthe ~~operations~~addition ~~and~~of ~~cash~~using ~~flows~~The Planet asInternet atServices ~~February 28th,~~to ~~2009~~provide ~~and~~web ~~for~~hosting ~~all~~services. ~~periods~~Due ~~presented~~to inthese improvements, the ~~attached~~company ~~financial~~expects ~~statements,~~an ~~have~~upward ~~been~~trend ~~included.~~in ~~Interim~~both ~~results~~sales ~~for~~and ~~the~~customer base, ~~six~~even ~~month~~without ~~period~~significant ~~ended~~advertising ~~February~~increases. ~~28th,~~In ~~2009~~other ~~are~~words, ~~not~~even ~~necessarily~~if the ~~indicative~~status ofquo ~~the~~is ~~results~~maintained, ~~that~~with ~~may~~no ~~be expected~~advertising ~~for~~injection, ~~the~~we ~~fiscal~~do ~~year~~still as expect a ~~whole~~positive upwards trend.

12 Monthly New Sign Ups

During the calendar year from January 2008 through December 2008 the company has double the rate at which clients are signing up for service. We ~~have~~attribute ~~identified~~much ~~below~~of ~~certain~~our ~~accounting~~rapid ~~policies~~growth and ability to add new clients at such a fast pace to our proprietary software that ~~are~~has ~~most~~allowed ~~important~~us to provide faster support to our clients. Being the ~~portrayal~~market leader in the development of this segment of video hosting has allowed us to get ahead of our ~~current~~competition ~~financial~~and ~~condition~~develop a reputation for having the latest and ~~results~~best webhosting technology. Below is a summary of ~~operation~~the monthly new signups for 2008 and 2009 to date respectively:

~~Development~~Again, ~~Stage~~as ~~Company~~a result of the last two months of litigation and the discovery of malicious code on its servers and network, we resulted in decrease in new signups. The code has since been removed and involving employees are no longer with the company. We expect to reestablish a positive trend of new signups in the months to come.

~~Rancho~~Market isAnalysis a development stage company as defined in the Statements of Financial Accounting Standards No. 7. All losses accumulated since inception have been considered as part of the Rancho’s development stage activities.

~~Property~~Industry analysts predict that the future of out-sourced web hosting is positive. Research by top ranked industry analysts International Data Corporation, Forrester Research and Ing Barings, indicates that custom hosting solutions such as dedicated, co-located, and managed services are the key growth areas of the future. Furthermore, research by Deutsche Bank states that managed services carry 45% margins and are considered the most important future source for web host providers.

~~Property~~AptHost.com ~~consists~~is already providing a wide selection of ~~land~~hosting ~~and~~services isbut ~~recorded~~what atsets ~~cost~~us apart are the specialty features we provide with them. ~~Land~~Management ~~improvements~~feels ~~are~~that ~~capitalized~~FFMPEG Hosting is going to see huge growth for years to come as more and ~~maintenance~~more scripts become available that allow people with little or no experience to publish sites. Combined with our custom built automation processes, ~~repairs~~clients will be able to have a site setup and ~~minor~~offering ~~replacements~~videos ~~are~~in ~~expensed~~a asmatter ~~incurred~~of minutes. These sites can have individual themes that cater to special interests and will all have the ability to earn money from advertising.

~~Stock~~With ~~Based~~this ~~Compensation~~ opportunity, many people are rushing to publish social media sites resulting in unprecedented growth. Below are articles describing the current market conditions and helps demonstrate the potential growth within the industry.

~~Rancho~~June ~~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”~~21, ~~and~~2007 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”.

By Georg Szalai/The Hollywood ~~Impairment~~Reporter ofNEW ~~Long-Lived~~YORK ~~Assets~~The global entertainment and media industry will expand at a 6.4 percent compound annual growth rate over five years to hit $2 trillion in 2011, according to PricewaterhouseCoopers’ “Global Entertainment and Media Outlook: 2007-2011.”

~~Rancho~~One ~~periodically~~estimate ~~evaluates~~likely ~~potential~~to ~~impairments~~cause ofa ~~its~~stir includes ~~long-lived~~the ~~assets,~~prediction ~~including~~that ~~intangibles~~U. ~~When~~S. ~~Rancho~~spending ~~determines~~on ~~that~~Internet ~~the~~advertising ~~carrying~~and ~~value~~access will ofsurpass ~~long-lived~~spending ~~assets~~on ~~may~~newspaper ~~not~~publishing bein ~~recoverable~~2009.Globally, ~~based~~PwC ~~upon the existence of one or more indicators of~~expects ~~impairment,~~Internet ~~Rancho~~advertising ~~evaluates~~and ~~the~~access ~~projected~~spending ~~undiscounted cash flows related~~ to ~~the~~grow ~~assets.~~from Ifan ~~these~~estimated ~~cash~~$177 ~~flows~~billion in ~~are~~2006 ~~less~~to ~~than~~$332 ~~the~~billion ~~carrying~~in ~~value of the assets~~2011, ~~Rancho~~making ~~measures~~for ~~the~~a ~~impairment~~13.5 ~~using~~percent ~~discounted~~compound ~~cash flows or other methods of determining~~annual ~~fair~~growth ~~value~~rate.

~~Long~~Source -~~lived~~ ~~assets to be disposed of are carried at the lower of cost or fair value less estimated costs of disposal~~http://bussola. wordpress.com/2007/06/22/global-media-outlook-2-tril-by-2011/

2.4.	RISKS AND UNCERTAINTIES
2.4.1	Limited Operating History for the Company

“There are 94 million Internet users in Japan (representing 73.8% of the population), according to Internet World Stats in June 2008. This was up 99.7% compared to 2000.” (Internet World Stats, August 2008) (source - http://www.etcnewmedia.com/review/default.asp?SectionID=11&CountryID=65)

~~The~~Customers ~~Company has its main asset is its property in Tulum, Mexico~~ and ~~serves~~Target asMarkets the main security and revenue generator for the Company’s shareholders. The Company has been operating its hotel only since February 2007 and therefore the Company has limited operating, investment or performance history.

The company's customer base includes all consumers and all 2small- to medium-sized businesses, including start-ups.~~4.2~~ ~~Competition~~They are mainly focused on developing video sharing and social media sites, with the potential to branch out into live streaming and eventually have their own online TV station.

~~There~~Target ~~are~~Market aSegment ~~number~~Strategy of hotels with which the Company will be forced to compete with in the downtown Financial District in order to obtain sufficient occupancy and room rental rates. Competition from other real estate developers and real estate services companies may adversely affect our ability to:

1.	attract purchasers
2.	sell undeveloped rural land

AptHost’s primary market niche was pursued due to its rapid growth potential. As a recently new market, it has shown potential opportunities to grow business within the FFMPEG market as well as significant opportunity to grow the company vertically into related markets. Being the first to bring FFMPEG to the shared hosting market has been instrumental in building the AptHost brand and has positioned our company to take advantage of the current demand for video hosting websites.

13Our secondary market is VPS and dedicated servers. This is a natural fit for us as many of our clients will outgrow their shared plans quickly due high demand for bandwidth and other server resources for their sites. Our company anticipated this need and has secured sufficient VPS and dedicated server capacity to accommodate this need seamlessly for our clients. Although it is our secondary market, it is fast growing into a very profitable one with margins in the 40 to 60% range.

The ~~presence~~third ofmarket ~~competing~~for ~~real~~us ~~estate~~is ~~development~~managed ~~companies~~services. inThis ~~Mexico~~market ~~may~~is, ~~impact~~as is on our ~~ability~~secondary tomarket, ~~raise~~a ~~additional~~derivative ~~capital~~of inthe ~~order~~current tostrengths ~~fund~~of ~~our~~the ~~property~~company. As ~~acquisitions~~clients ormove ~~property~~from ~~developments~~shared into ~~Mexico~~dedicated ifservers, ~~investors~~most ~~are~~will ofnot have the ~~view~~in house ~~that~~expertise ~~investments in~~to ~~competitors~~manage ~~are~~their ~~more~~own ~~attractive~~servers. ~~Competition~~AptHost ~~could~~offers ~~also~~3 ~~reduce~~management ~~the~~plans to ~~availability~~match ~~of properties of merit or increase~~ the ~~cost~~needs of ~~acquiring~~each ~~the properties~~client.

~~2.4.3~~Competition ~~Nature of Investments~~

~~Shareholders~~Competition ~~must~~comes ~~rely~~from onestablished ~~the~~hosts ~~ability,~~currently ~~expertise,~~offering similar ~~judgment~~hosting solutions and ~~discretion of management of the Company. There is no assurance that the Property or investments in the Property made~~ by ~~the~~new ~~Company~~companies ~~will~~attempting ~~perform~~to ingain ~~a manner which will be profitable to~~market ~~the Company~~share.

~~2.4.4~~Key ~~Ability~~competitors ~~for~~are ~~the~~detailed ~~Company~~as tofollows: ~~Raise Sufficient Capital for Development Financing~~

~~Shareholders~~Cirtex ~~are~~& ~~dependent~~HostV ~~upon~~- ~~the~~An ~~ability~~established ofcompany ~~the~~located ~~Management~~in New York, NY. The owner of ~~the~~Cirtex ~~Company~~started tooffering ~~raise~~FFMPEG ~~sufficient~~before ~~capital~~us orby ~~financing~~a tofew months ~~complete~~but ~~the~~only ~~property~~to ~~acquisition~~VPS and todedicated ~~later~~server ~~obtain~~clients. ~~the~~Following ~~sufficient~~our ~~development~~lead ~~financing~~they soon started offering it on a shared platform as well. They have recently launched a second site called HostV that handles only Dedicated and ~~capital~~VPS ~~required~~clients. Cirtex does not however seem to ~~construct~~be ~~the~~interested in branding itself as a FFMPEG ~~commercial~~provider ~~development~~like AptHost.

2Glowhost - Entered the FFMPEG market in October of 2007.4 Similar to AptHost, they also offer a full selection of hosting platforms and are becoming known for supporting FFMPEG.5 ~~Factors~~The ~~Affecting~~company ~~Property~~seems to offer a good service however, they have been unable to capture the market share that AptHost has as evidenced by their popularity and traffic graphs show below.

~~The~~Vistapages ~~Company's~~- ~~success~~A ~~depends~~Canadian ~~upon~~owned ~~the~~and ~~success~~operated ofcompany, ~~the~~Vistapages ~~development~~has ~~approval~~similar ~~process,~~roots ~~the~~to ~~ability~~AptHost.com, offocusing on the ~~Company~~Canadian tomarket. ~~service~~Vistapages’ ~~the~~has ~~land~~experienced ~~loan,~~success ~~the~~but ~~development~~they ~~financing,~~have ~~and~~been ~~any~~unable ~~other~~to ~~costs~~match ~~that~~AptHost’s ~~come~~growth uprate asduring last ~~they~~year. ~~relate~~The company claims to ~~the~~have ~~development~~12,000 ~~process.~~domains ~~Property~~hosted after four years, ~~Economic,~~ ~~governmental~~which is a significant number of domains, ~~industry~~however ~~and~~AptHost ~~internal~~feels ~~factors~~confident that ~~detrimentally~~due ~~affect~~to ~~the~~Vistapages’ ~~financial~~higher ~~health~~pricing ofstructure ~~the~~over ~~Property~~all ~~will~~and ~~cause~~poor acustomer ~~resulting~~satisfaction account ~~loss~~it ofwill ~~value~~continue into ~~the~~lag ~~Company's~~behind ~~investments~~AptHosts unmatched growth rate.

2AptHost.4com In order to compare AptHost with its competitors, below is our company’s Alexa ranking.6 ~~Possible~~As ~~Loss~~can be noted, our ranking is improving notably each month as more and more visitors find their way to the site. AptHost is not only competitive with all its major competitors; it consistently outperforms them in some of ~~Limited~~the ~~Liability~~key performance metrics.

~~The~~Marketing ~~Company~~Mix may be carrying on business in jurisdictions other than that under which it was formed. The Company will be registered as an extra-jurisdictional Company in those jurisdictions where the Company is advised that it will be carrying on business by virtue of this Offering or otherwise and where there is provision for registration as an extra jurisdictional Company. However, there is a risk that Unit Holders may not be afforded limited liability in jurisdictions where the Company is not registered to the extent that principles of conflicts of law recognizing the limitation of liability of Unit Holders have not been authoritatively established with respect to Companys formed under laws of one jurisdiction but carrying on business in other jurisdictions.

2AptHost.~~4.7~~com ~~Reliance~~provides quality support, innovative features and a total package solution which gets a client on ~~Company~~the web quickly and professionally.

~~Shareholders~~AptHost.com ~~will~~pricing beis ~~required~~highly tocompetitive ~~rely~~making onus the ~~ability~~hosting ofprovider ~~the Company~~ to ~~actively manage the assets of the Company~~choose. ~~The~~Our ~~Company~~extensive will make the actual decisions on the development of the Property upon which the success of the Company will depend. No assurance can be given that the business approaches utilized by the Manager will prove successful. There can be no assurance that satisfactory replacements for Company will be availableabilities, ifexperience ~~needed.~~and ~~The~~track ~~Company~~record ~~will depend, to a great extent,~~ on ~~the services~~customer ofsatisfaction aare ~~very~~compelling ~~limited~~reasons ~~number of individuals of the Company in the administration of the Company's business. The loss of such services~~ for ~~any~~clients ~~reason could impair the ability of the Manager Company~~ to ~~perform~~signup ~~its~~with ~~advisory activities on behalf of the Company~~AptHost.

~~2.4.8~~Sales ~~Reliance~~Strategy ~~on Executive~~

~~The~~AptHost ~~Company~~markets ~~will~~to ~~depend~~a ~~extensively~~diverse base of customers. We aim to provide end to end services and support combined with competitive pricing. Our main focus is a value product, the combination of quality and affordability. Through our innovations in the FFMPEG market, we have been able to consistently provide better and better products, with faster and more attentive customer service all while lowering costs. This has allowed us to ensure we maintain a competitive pricing model at all times and continue to work on ~~its~~branding ~~executive~~AptHost ~~management~~as ~~raise~~a ~~sufficient~~quality ~~capital~~hosting provider and one that has the solution for any clients needs. As a provider of a complete solution, we are positioned to form a longstanding partnership with our clients through our ability to tailor our service over and over again to meet our customer’s evolving needs.

~~2.4.9~~Positioning ~~Limited Ability to Liquidate Shares~~

~~The~~AptHost ~~current~~has ~~market~~positioned ~~for~~itself ~~liquidating~~as ~~the~~a ~~shares~~leader ~~and~~in ~~selling~~ the ~~shares~~development isof onFFMPEG ~~the~~hosting ~~Over~~in ~~the~~a ~~Counter~~shared ~~Bulletin~~server ~~Board~~environment. inWe ~~the~~have ~~United~~added ~~States.~~to ~~Shareholders~~our ~~are~~hosting ~~also~~service ~~under~~free ~~certain~~script ~~resale~~installation ~~restrictions~~and asquality ~~per~~support ~~rule~~on ~~144 of~~ the ~~United~~varied ~~States~~scripts ~~Securities~~clients ~~Act~~desire offor ~~1933~~their sites. We ~~The~~intend ~~current~~to ~~market~~further ~~for~~solidify ~~the~~our ~~shares~~position isas ~~illiquid~~a ~~and~~leader ~~could~~in bethe ~~difficult~~FFMPEG tomarket ~~achieve~~by ~~the~~creating ~~current~~increasing ~~market~~ value for ~~the~~our ~~shares.~~clients ~~This~~through ~~Offering~~the continued development of ~~Units~~software isand ~~not~~support ~~qualified~~for bythe ~~way~~creation and maintenance of ~~prospectus~~websites, the additional development of products and ~~consequently~~scripts, and the ~~resale~~ability ofto ~~Units~~support ~~could~~customers belong ~~subject~~term ~~to restrictions~~through ~~under~~vertical ~~applicable~~integration ~~securities~~of ~~legislation~~related services.

~~2.4.10~~Promotion ~~Tax Liability~~

~~Each~~Affiliate ~~Unit~~programs ~~Holder~~have isbecome ~~required~~a topopular ~~include~~way into ~~computing~~get ~~income,~~others ato ~~pro~~promote ~~rata~~products. ~~share~~Our ofaffiliate ~~the~~program ~~income~~will ofbe ~~the~~strengthened ~~Company~~with ~~allocated~~larger payouts to ~~him.~~entice ~~Income~~affiliates ~~will be allocated~~ to ~~Unit~~send ~~Holders~~traffic ~~according~~ to ~~the~~apthost.com. ~~terms~~Word of ~~the~~mouth ~~Company~~has ~~Agreement~~always ~~and~~been ~~without~~a ~~regard~~powerful toway ~~the~~to ~~acquisition~~promote ~~price~~our ofbusiness ~~such~~and ~~Units.~~we ~~Unit~~will ~~Holders~~continue ~~may~~employ ~~have~~the antalents ~~income tax liability in respect~~ of ~~profits~~professionals ~~not~~to ~~distributed~~promote ~~and~~through ~~also~~word ~~in respect~~ of ~~returns~~mouth ofadvertising ~~capital~~ on ~~the~~industry ~~Units~~related ~~exceeding~~forums, ~~the~~blogs ~~adjusted~~and ~~cost~~review ~~base~~sites ofwhere ~~their~~they ~~Units~~are respected members.

14 Pricing

2Our products and services are priced to initially attract the lower end, beginner users within the market with incentives to move the client into higher revenue, longer term agreements.4 Since moving to this pricing structure on our shared plans, we have seen a huge increase in monthly revenue and new signups.11 ~~Potential~~We ~~Indemnification~~carry ~~Obligations~~similar incentives on all our plans, but we have seen the most success with signing up customers on basic plans first and then selling add on services as they see everything AptHost can offer their companies.

~~Under~~On ~~certain circumstances,~~ the ~~Company~~dedicated ~~might~~server beplans, ~~subject~~we moved to ~~significant~~a ~~indemnification~~price-match ~~obligations~~model inthe ~~respect~~retail pricing of ~~the~~our ~~Company~~main ordedicated ~~certain~~server ~~parties~~vendor, ~~related to them~~(ServerBeach). ~~The~~This ~~Company~~is ~~will~~with ~~not~~the ~~carry~~intent ~~any~~that ~~Insurance~~when toour ~~cover~~clients ~~such~~compare ~~potential~~pricing, ~~obligations~~ours ~~and~~compares ~~none of~~favorably. ~~the~~It ~~foregoing~~has ~~parties~~been ~~will~~a besuccessful strategy ~~insured~~to ~~for~~have ~~losses~~the ~~for~~same ~~which~~aggressive ~~the~~pricing ~~Company~~as ~~has~~one ~~agreed~~of tothe ~~indemnify~~most ~~them.~~well-advertised, ~~Any~~dedicated ~~indemnification~~server ~~paid~~providers byon the ~~Company~~Internet. ~~would~~We ~~reduce~~believe ~~the~~that ~~Company's~~AptHost ~~net~~outperforms ~~asset~~ServerBeach ~~value~~in ~~and~~added services, bywhich ~~extension,~~gives AptHost the ~~value~~edge ofin ~~the~~retaining ~~shares~~and serving clients long-term.

~~2.4.12~~Glossary ~~Real~~of ~~Property~~terms ~~Development and Ownership~~

~~Real~~FFmpeg ~~estate~~hosting developments and investments are generally subject to varying degrees of risk depending on the nature of the property. Such risks include changes in general economic conditions , government regulation (such as taxation of property and environmental legislation) and the attractiveness of hotel suites to potential purchasers. In addition, each segment in the real estate development industry is ~~capital~~a ~~intensive~~term ~~and~~that is ~~typically~~used ~~sensitive~~ to ~~interest~~refer ~~rates.~~to ~~The~~any ~~income~~"assortment ~~generated~~of ~~by the~~software ~~Property in~~ which ~~the Company has an interest~~ is ~~dependent upon general economic conditions and~~available, ~~accordingly,~~which ~~the~~helps ~~return to investors may be affected by changes~~ in ~~those conditions. Certain significant expenditures~~recording, ~~including~~converting ~~property taxes, maintenance costs, mortgage payments, insurance costs~~ and ~~related~~streaming ~~charges~~a ~~must~~digital bevideo ~~made regardless of whether~~ or ~~not~~an aaudio"[1], ~~property~~and ~~is producing sufficient income~~ to ~~service~~those ~~such~~domain ~~expenses.~~registrars Inand ~~addition,~~web ~~the Property of the Company may be subject to~~hosting ~~mortgages~~companies ~~to complete the purchase of a particular Property~~ which ~~require~~provide ~~debt service payments. If~~ the ~~Company~~above isassortment ~~unable~~of orsoftware ~~unwilling~~ to ~~meet~~video ~~mortgage~~hosting ~~payments on any property, losses could be sustained as a result of the exercise by the mortgagee of its rights of foreclosure or sale~~services.
~~2.4.13~~Virtual ~~Ability~~private toserver, ~~Obtain~~also known as Virtual Dedicated Server (VDS), ~~Pre-Development~~a ~~Approvals~~type toof ~~Allow~~web ~~Future~~hosting ~~Development~~based on the ~~Property~~concept of partitions on mainframes and advanced resource scheduling to divide a computer into many virtually isolated servers. It is a server that runs inside another server. Each VDS acts like a dedicated server but shares the same hardware. • FFMPEG
~~The~~Dedicated ~~Company~~hosting ~~will~~service, bededicated ~~subject~~server, toor ~~risks~~Managed ~~associated~~hosting ~~with~~service ~~the~~are ~~development~~types of ~~the~~Internet ~~Property~~hosting ~~such~~where asthe ~~municipal~~client ~~and~~leases ~~government~~an ~~approvals~~entire ~~along~~server ~~with~~not ~~potential~~shared ~~environmental~~with ~~problems~~anyone. AsThis ais ~~result~~more ~~the~~flexible ~~ability~~than toshared ~~develop~~hosting, ~~the~~as ~~Property~~organizations ~~may be affected from time to~~have ~~time~~full incontrol ~~varying~~over ~~degrees by obtaining or not obtaining~~ the ~~appropriate~~server(s), ~~municipal~~including orchoice ~~government~~of ~~approvals~~operating orsystem, ~~alternatively~~hardware, ~~such~~etc. ~~approval~~Server ~~may~~administration becan ~~subject~~usually tobe ~~such~~provided ~~terms~~by ~~and conditions that may delay or change~~ the ~~Property~~hosting ~~and~~company ~~thereby~~as ~~altering~~an ~~the profitability~~add-on ~~of such Property~~service. ~~While~~In ~~management~~some ~~has~~cases ~~obtained~~a ~~the~~dedicated ~~necessary~~server ~~predevelopment~~can ~~approvals~~offer ~~its~~less ~~past~~overhead ~~projects,~~and ~~this is NOT~~ a ~~guarantee~~larger return ofon ~~future performance~~investment.
~~2.4.14~~Apache ~~Construction~~Tomcat ~~Costs~~is ~~and~~the ~~Uncertainty~~servlet ofcontainer ~~Density~~that is used in the official Reference Implementation for the Java Servlet and JavaServer Pages technologies.
~~The~~Joomla ~~real estate industry~~ is ~~significantly~~one ~~impacted~~of bythe ~~fluctuations~~most inpowerful ~~the~~Open ~~cost~~Source ofContent ~~construction~~Management ~~and~~Systems ~~servicing~~on ofthe ~~land~~planet. ~~Any~~It ~~material~~is ~~increase~~used inall ~~construction~~over ~~and/or servicing costs may have a materially adverse effect on~~ the ~~Company~~world infor ~~the~~everything ~~timing~~from ~~of selling~~simple ~~the~~websites ~~Property~~to orcomplex ~~having~~corporate ~~the~~applications. ~~Company~~Joomla ~~purchase~~is aeasy ~~portion~~to orinstall, ~~all~~simple ofto ~~the~~manage, ~~Property~~and reliable.
2Social Media describes the online tools and platforms that people use to share opinions, insights, experiences, and perspectives with each other.4 Social media can take many different forms, including text, images, audio, and video.15 ~~Liquidity~~Popular social ofmediums ~~Real~~include ~~Estate~~blogs, message boards, podcasts, wikis, and vlogs

~~Real estate is relatively illiquid~~2.2 ~~Such~~Hotel ~~illiquidity~~ParaYso ~~may limit the ability of the Company to diversify its portfolio promptly in response to changing economic or investment conditions. In recessionary times~~Resort, ~~it may be virtually impossible to dispose of certain types of real estate~~Tulum, ~~particularly~~Quintana ~~commercial real estate. The costs of holding real estate are considerable~~Roo, ~~and~~Mexico the Company, as a holder of real estate, during a Recessionary period may be faced with ongoing expenditures with little prospect of incoming receipts. Without adequate cash reserves, it may be necessary for the Company to dispose of Property at low prices. Financial difficulties of other property owners may lead to distress sales which could further depress real estate values in markets in which the Company operates.

2Our company separately owns and operates property (the “Solidaridad Property”) in Tulum, Mexico as noted in Figure 1.4 The property consists of two developable pods where an additional 15 hotel units can be built.16 ~~Regulatory~~The ~~Approvals~~hotel has been open since February 7th, 2007. We also manage the adjoining 11 hotel suites and receive income from the supply of management services. In November 29, 2005 the Company entered into an agreement with Monica Galan-Rios for the purchase of certain lands located in Solidaridad, Mexico consisting of approximately 1,220 square meters, See Figure 1 below.

~~From~~2.2.1 ~~time~~Location ~~to time the development~~ of ~~Property~~Hotel byParaYso ~~the Company will or may require zoning~~Resort, environmental and other approvals from local government agencies. The process of obtaining such approvals may take many months and there can be no assurance that the necessary approvals for the Property will be obtained. Holding costs accrue while regulatory approvals are being sought and delays can render Property uneconomic at any given period. The ManagerTulum, ~~while~~Quintana ~~having a track record in other projects of obtaining development approvals on other lands~~Roo, ~~cannot~~Mexico ~~guarantee that the Property within this Offering will receive the same level of development approvals in a timely fashion.~~

15 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 in the city of Tulum, 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.

~~2.4.17~~ Figure ~~Environmental~~1 ~~Matters~~ Property Location

Under various environmental laws, ordinances and regulations, the current or previous owner or operator of real property may be liable for the costs of removal or rededication of hazardous or toxic substances on, under or in such property2.3 ~~Such~~PLAN ~~laws could~~OF impose liability whether or not the Company knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of hazardous or toxic substances, or the failure to remove or rededicate such substances, if any, could adversely affect the Company's ability to sell such real estate or to borrow using such real estate as collateral and could potentially also result in claims against the Company OPERATION

AptHost plans to devote $200,000 to the development and 2advertising budget for the 2009 fiscal year.~~4.18~~ ~~General~~The ~~Real~~company ~~Estate~~primarily ~~Risks~~needs capital to fund three areas of controlled growth in the company:

~~Various~~Increased ~~factors~~personnel can affect the timing and profitability of real estate development. There is no assurance that such plans will be met on a timely basis or at all. There is also no assurance that the Property can be rented to ahandle ~~sufficient~~increased ~~occupancy level~~sales to make the development economically viable. The Company will be subject to risks inherent in the ownership of land intended for the future development of commercial real estate including: (i) unforeseen delays with the municipal approval process; (ii) cost overruns; (iii) the inability to secure the appropriate permits and other necessary approvals in a timely and cost-effective manner; (iv) the inability to rent sufficient rooms to an occupancy level that is viable; and (v) the inability to obtain suitable property for developmentservice.
~~2.4.19~~Increase ~~Property~~advertising ~~Ownership~~for ~~Risk~~the purpose of ~~Tulum~~branding ~~Hotel~~and ~~ParaYso~~increase ~~Property~~sales.
~~Under~~Research the terms of the property purchase agreement for our Solidaridad Property, Ms. Galan-Rios assigned to us her interest in an occupation order issued by the Ejidal Commissariat of the Ejido NCPE Jose Maria Pino Suarez for the use and ~~possession of~~development ~~the Solidaridad Property. Under Mexican law we own the right~~ to ~~possess~~bring ~~and~~new ~~make~~products ~~use of our Solidaridad Property but do not own title~~ to the ~~property until a legal survey is completed by the Mexican government~~market. ~~Because we do not own legal title~~ to our Solidaridad Property we are subject to the risk that: (i) conditions may be imposed on our occupation order for the property and/or the order may be cancelled; (ii) the Mexican government may delay the implementation of a legal survey or decide not to undertake a survey of the property; and (iii) if a legal survey is completed there is no assurance that we will not be required to pay additional fees for the transfer of legal title to the property or that the property boundaries will be identical to those granted in the occupation order issued by the Ejidal Commissariat. The occurrence of any of the above risks would have a material adverse effect our business, results of operations or financial condition.

~~2.4.20~~MILESTONES ~~Environmental~~AND ~~And~~OBJECTIVES ~~Other Regulations~~

~~Our~~The ~~present~~table ~~operations~~below ~~and~~highlights ~~development~~our ~~activities~~milestones ~~in Mexico are subject to Mexican state~~ and ~~local~~objectives ~~laws~~over ~~and regulations, respectively, relating to~~ the ~~protection~~next ~~of the environment, including those concerning water supply, wastewater, noise, soil~~twelve ~~pollution~~months: ~~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.

	ANTICIPATED
MILESTONES AND OBJECTIVES	COST	TIME FRAME

PHASE I – FINANCE THE MOVE TO BELLEVUE WASHINGTON	$100,000	6 Months
AND COMMENCE ADVERTISING CAMPAIGN
AptHost Communications USA Inc.

PHASE II – FINANCE AN CONTINUED ADVERTISING AND	$100,000	12 Months
PROMOTION CAMPAIGN AptHost Communications USA Inc.

PHASE III – PUBLIC COMPANY MAINTENCE AND CANADIAN	$50,000	12 Months
LISTING Finance the continued maintenance of the public company, Rancho Santa Monica Developments, Inc. - Accounting Fees - Legal Fees, Auditor Fees
TOTAL	$250,000	-

~~The~~We ~~Solidaridad~~anticipate ~~Property~~spending isapproximately ~~subject~~$250,000 toin ~~federal,~~the ~~state~~next ~~and~~12 months ~~local~~in ~~regulations~~pursuing ~~and~~our ~~restrictions~~plan ~~that~~of ~~may~~operations. ~~impose~~Currently, ~~significant~~we ~~limitations~~have oncash ~~our~~of ~~ability~~$1,456 which is insufficient to ~~develop~~allow ~~them.~~us Into ~~addition,~~meet our ~~ownership~~current commitments and ~~operation~~to complete ofour ~~real~~plan ~~property~~of isoperation. ~~subject~~We towill ~~extensive and~~require ~~evolving~~substantial ~~federal,~~additional ~~state~~financing in ~~and~~order ~~local~~to ~~environmental~~implement ~~laws~~our ~~and~~long ~~other regulations.~~term ~~The~~business ~~provisions~~strategy and ~~enforcement~~plan of ~~these~~operation. ~~environmental~~It is ~~laws~~anticipated ~~and~~that ~~regulations~~any ~~may~~additional ~~become~~financing ~~more~~will ~~stringent~~likely be in the ~~future.~~form ~~Violations~~ of equity ~~these~~financing ~~laws~~as ~~and~~substantial ~~regulations~~debt ~~can~~financing ~~result~~is ~~in:~~not expected to be available at this stage of our business.

16Our actual expenditures and business plan may differ from the one stated above. Our Board of Directors may decide not to pursue this plan. In addition, we may modify the plan based on available financing.

1. LIQUIDITY ~~civil~~AND ~~penalties;~~CAPITAL 2.RESOURCES ~~remediation expenses; 3. natural resource damages; 4. personal injury damages; 5. potential injunctions; 6. cease and desist orders; and 7. criminal penalties.~~

InAs ~~addition, some~~ of ~~these~~May ~~environmental laws impose strict liability~~31, ~~which~~2009 ~~means that~~ we ~~may~~had becash ~~held liable for any environmental damages~~ on ~~our~~hand ~~property regardless~~ of ~~our fault~~$24,054. ~~The~~Since ~~presence~~inception, ofwe ~~hazardous~~have ~~substances~~issued oncommon astock ~~property~~to ~~may~~raise ~~also adversely~~money ~~affect~~for ~~our~~operations ~~ability~~and tofor ~~sell or develop the~~ property oracquisitions. toCurrently, ~~borrow~~our ~~using~~Solidaridad ~~the~~Property ~~property~~is asfully ~~collateral~~operational.

~~Changes~~We inanticipate ~~laws~~continuing orto ~~the~~rely ~~interpretation~~on ~~thereof,~~equity ~~new~~sales ~~enforcement~~ of ~~laws,~~our ~~the~~common ~~identification~~stock ofin ~~new~~order ~~facts~~to orcontinue ~~the~~to ~~failure~~fund ofour ~~other~~business ~~parties~~operations. toIssuances ~~perform~~of ~~remediation~~additional ~~could~~shares ~~all~~will ~~lead~~result in dilution to ~~new~~our orexisting ~~greater~~stockholders. ~~liabilities~~There ~~that~~is ~~could~~no ~~materially~~assurance ~~adversely~~that ~~affect~~we ~~our~~will ~~business,~~achieve ~~results~~any of ~~operations~~additional sales of our equity securities or ~~financial~~arrange ~~condition.~~for debt or other financing for to fund our planned business activities.

~~2.4.21~~OFF-BALANCE ~~The~~SHEET ~~Occurrence In Mexico Of Natural Disasters~~ARRANGEMENTS

~~Our~~We ~~property~~have isno ~~located~~significant inoff-balance ~~Mexico.~~sheet ~~The~~arrangements ~~occurrence~~that ofhave ~~natural~~or ~~disasters,~~are ~~such~~reasonably aslikely ~~fires,~~to ~~hurricanes,~~have ~~floods,~~a ~~unusually~~current ~~heavy~~ or ~~prolonged~~future ~~rain~~effect ~~and~~on ~~droughts~~our infinancial ~~Mexico~~condition, ~~could~~changes ~~have~~in afinancial ~~material~~condition, ~~adverse~~revenues ~~effect~~or onexpenses, ~~our~~results ~~ability~~of tooperations, ~~develop~~liquidity, ~~properties~~capital expenditures or ~~realize income~~capital ~~from our property~~resources.

~~2.4.22~~CRITICAL WeACCOUNTING DoPOLICIES ~~Not Carry Comprehensive Liability Insurance for the Mexico Property.~~

WeThe dofinancial ~~not~~statements ~~currently~~presented ~~carry~~with ~~comprehensive~~this ~~liability,~~quarterly ~~fire,~~report ~~hurricane,~~on ~~storm,~~Form ~~earthquake~~10-Q ~~and~~have ~~business~~been ~~interruption~~prepared ~~insurance~~in accordance with ~~respect~~generally toaccepted ~~our~~accounting ~~business~~principles ~~operations~~ in ~~Mexico~~the United States of America for interim financial information. ~~Should~~These financial statements do not include all information and footnote disclosures required for an ~~uninsured~~annual ~~loss~~set ~~occur,~~of wefinancial ~~could~~statements ~~lose~~prepared ~~our~~under ~~capital~~United ~~invested~~States ingenerally accepted accounting principles. In the opinion of our management, all adjustments (consisting solely ~~Solidaridad~~of ~~Property~~normal recurring accruals) considered necessary for a fair presentation of the financial position, asresults ~~well~~of operations and cash flows as at May 31, 2009 and for all periods presented in the ~~anticipated~~attached ~~future~~financial ~~revenues~~statements, ~~from~~have ~~such~~been ~~property~~included. Interim ~~and~~results ~~would~~for ~~continue~~the tothree bemonth ~~obligated~~period onended ~~any~~May ~~indebtedness~~31, or2009 ~~other~~are ~~obligations~~not ~~related~~necessarily toindicative of the ~~property.~~results ~~Any~~that ~~such~~may ~~loss~~be ~~could~~expected ~~have~~for athe ~~material~~fiscal ~~adverse~~year ~~effect~~as ~~on Rancho~~a whole.

~~2.4.23~~We ~~Future~~have ~~Equity~~identified ~~Financings~~below ~~May~~certain ~~Dilute~~accounting ~~Existing~~policies ~~Stockholders’~~that ~~Ownership~~are ~~Interests.~~most important to the portrayal of our current financial condition and results of operation:

We rely upon the availability of equity capital to fund our growth, which financing may or may not be available on favorable terms or at all. Equity capital could include our common stock or preferred stock. We cannot guarantee that additional financing, refinancing or other capital will be available in the amounts we desire or on favorable terms.Property

~~There~~Property isconsists noof ~~assurance~~land ~~that~~and weis ~~will~~recorded ~~achieve~~at ~~any~~cost. ~~additional~~Land ~~sales~~improvements ofare ~~our~~capitalized ~~equity~~and ~~securities~~maintenance, orrepairs ~~arrange~~and ~~for~~minor ~~debt~~replacements orare ~~other~~expensed ~~financing~~as ~~to fund our planned business activities~~incurred.

~~ITEM~~ Stock 3.Based Compensation

~~CONTROLS~~Rancho ~~AND~~accounts ~~PROCEDURES~~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”.

~~Evaluation~~Impairment Ofof ~~Disclosure~~Long-Lived ~~Controls~~Assets ~~And Procedures~~

AsRancho ofperiodically ~~the~~evaluates ~~end~~potential impairments of ~~the~~its ~~period~~long-lived ~~covered by this Quarterly Report~~assets, ~~our~~including ~~management~~intangibles. ~~carried~~When ~~out~~Rancho andetermines ~~evaluation,~~that ~~under~~ the ~~supervision~~carrying ~~and~~value ~~with the participation~~ of ~~our~~long-lived ~~principal~~assets ~~executive~~may ~~officer~~not ~~and~~be ~~principal~~recoverable ~~financial~~based ~~officer,~~upon of the ~~effectiveness~~existence of ~~the~~one ~~design~~or ~~and~~more ~~operation~~indicators of ~~our~~impairment, ~~disclosure~~Rancho ~~controls~~evaluates ~~and~~the ~~procedures~~projected ~~(as~~undiscounted ~~defined~~cash inflows ~~Rules~~related ~~13a-15(e)~~to ~~and 15d-15(e) under~~ the ~~Exchange Act)~~assets. If ~~Based~~these oncash ~~this~~flows ~~evaluation,~~are ~~our~~less ~~principal executive~~than ~~officer~~the ~~and~~carrying ~~principal~~value ~~financial officer has concluded that our disclosure controls and procedures are, as~~ of the ~~date covered by this Quarterly Report~~assets, ~~effective~~Rancho tomeasures ~~ensure that~~ the ~~information~~impairment ~~required~~using todiscounted becash ~~disclosed~~flows ~~by us in the reports that we file~~ or ~~submit~~other ~~under~~methods ~~the~~of ~~Exchange Act is recorded,~~determining ~~processed,~~fair ~~summarized and reported within the time periods specified in the SEC rules and forms~~value.

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

~~PART~~ 2.4. IIRISKS -AND ~~OTHER INFORMATION~~UNCERTAINTIES

~~ITEM~~ Our 1operating results may be adversely impacted by worldwide political and economic uncertainties and specific conditions in the markets we address. As a result, the market price of our common stock decline.

~~LEGAL~~ ~~PROCEEDINGS~~Recently general worldwide economic conditions have experienced a deterioration due to credit conditions resulting from the recent financial crisis affecting the banking system and financial markets and other factors, slower economic activity, concerns about inflation and deflation, volatility in energy costs, decreased consumer confidence, reduced corporate profits and capital spending, the ongoing effects of the war in Iraq and Afghanistan, recent international conflicts and terrorist and military activity, and the impact of natural disasters and public health emergencies. These conditions make it extremely difficult for both us and our customers to accurately forecast and plan future business activities, and they could cause U.S. and foreign businesses to slow spending on our services, which could delay and lengthen our new customer sales cycle and cause existing customers to do one or more of the following:

~~We commenced an action on February 3rd, 2009 against~~ ~~the~~Cancel ~~principals~~or ofreduce ~~AptHost~~planned ~~and~~expenditures ~~its affiliated companies~~ for ~~breach~~our ~~of contract, intential interference with business, fraudulent conveyance, and both preliminary and permanent injunctive relief.~~ services;
~~ITEM~~ Seek 2.to lower their costs by renegotiating their contracts with us;
~~UNREGISTERED~~ Move ~~SALES~~their OFhosting ~~EQUITY~~services ~~SECURITIES~~in-house; ~~AND USE OF PROCEEDS.~~ or
~~None~~ Switch to lower-priced solutions provided by us or our competitors.

~~ITEM~~ Customer 3collections are our primary source of cash. We have historically grown through a combination of an increase in new customers and revenue growth from our existing customers. We have experienced a decrease in revenue from our existing customer base, and if the current market conditions continue to deteriorate we may experience continued or more substantial decrease in revenue from our customer base, including through reductions in their commitments to us, and/or longer new customer sales cycles. If these events were to occur, we could experience a decrease in revenues and reduction in operating margins. Furthermore, during challenging economic times our customers may face issues gaining timely access to sufficient credit, which could result in an impairment of their ability to make timely payments to us. We have experienced an increase in our allowance for doubtful accounts already. If our customers’ ability to pay is further challenged, we may be required to further increase our allowance for doubtful accounts. We cannot predict the timing, strength or duration of any economic slowdown or subsequent economic recovery. If the economy or markets in which we operate do not continue at their present levels or continue to deteriorate, we may record additional charges related to the impairment of goodwill and other long-lived assets, and our business, financial condition and results of operations could be materially and adversely affected.

~~DEFAULTS~~ Finally, ~~UPON~~like many other stocks, our stock price decreased during the onset of the economic downturn. Although our stock price has recently increased, if investors have concerns that our business, financial condition and results of operations will ~~SENIOR~~be ~~SECURITIES~~negatively impacted by a continued worldwide economic downturn, our stock price could decrease again.

~~None~~ If we are unable to manage our growth effectively our financial results could suffer and our stock price could decline.

~~ITEM~~ The 4growth of our business and our service offerings has strained our operating and financial resources. Further, we intend to continue to expand our overall business, customer base, headcount, and operations. Creating a global organization and managing a geographically dispersed workforce requires substantial management effort and significant additional investment in our operating and financial system capabilities and controls. If our information systems are unable to support the demands placed on them by our growth, we may be forced to implement new systems which would be disruptive to our business. We may be unable to manage our expenses effectively in the future due to the expenses associated with these expansions, which may negatively impact our gross margins or operating expenses. If we fail to improve our operational systems or to expand our customer service capabilities to keep pace with the growth of our business, we could experience customer dissatisfaction, cost inefficiencies, and lost revenue opportunities, which may materially and adversely affect our operating results.

~~SUBMISSION~~ Our OFphysical ~~MATTERS~~infrastructure TOis Aconcentrated ~~VOTE~~in OFvery ~~SECURITY~~few facilities and any failure in our physical infrastructure or services could lead to significant costs and disruptions and could reduce our revenues, harm our business reputation and have ~~HOLDERS.~~a material adverse effect on our financial results.

~~None~~ Our network and power supplies and data centers are subject to various points of failure, and a problem with our generators, uninterruptible power supply, or UPS, routers, switches, or other equipment, whether or not within our control, could result in service interruptions for some or all of our customers or equipment damage. Because our hosting services do not require geographic proximity of our data centers to our customers, our hosting infrastructure is consolidated into a few large facilities. Accordingly, any failure or downtime in one of our data center facilities could affect a significant percentage of our customers. While data backup services are included in our hosting services, the majority of our customers do not elect to pay the additional fees required to store their backup data offsite in a separate facility. The total destruction or severe impairment of any of our data center facilities could result in significant downtime of our services and the loss of vast amounts of customer data. Since our ability to attract and retain customers depends on our ability to provide customers with highly reliable service, even minor interruptions in our service could harm our reputation. The services we provide are subject to failure resulting from numerous factors, including:

~~ITEM~~ Human 5.error or accidents (such as an airplane crash into one of our facilities, some of which are located near major airports);
~~OTHER~~ ~~INFORMATION.~~Power loss;
~~None.~~ Equipment failure;
~~ITEM~~ Internet 6.connectivity downtime;
~~EXHIBITS~~ Improper ~~AND~~building ~~REPORTS~~maintenance ONby ~~FORM~~the ~~8-K.~~landlords of the buildings in which our facilities are located;

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

Physical or electronic security breaches;
~~(1)~~ Fire, ~~Filed~~earthquake, ~~with~~hurricane, ~~the SEC as an exhibit to our Registration Statement on Form SB-2 originally filed on January 29~~tornado, ~~2005~~flood, asand ~~amended.~~other natural disasters;
18 Water damage;
~~REPORTS ON FORM 8-K~~ Terrorism;

~~We filed the following Current Reports on Form 8-K during the~~ ~~fiscal~~Sabotage ~~quarter~~and ~~ended~~vandalism; ~~February 28th, 2009:~~and

Date of Form 8-K	Date of Filing with the SEC	Description of the Form 8-K
December 1, 2008	December 4, 2008	Acquisition Agreement of AptHost Communications USA Inc.

Failure by us or our vendors to provide adequate service to our equipment.

~~SIGNATURES~~ Additionally, in connection with the expansion or consolidation of our existing data center facilities from time to time, there is an increased risk that service interruptions may occur as a result of server relocation or other unforeseen construction-related issues.

In We ~~accordance~~have ~~with~~experienced ~~the~~interruptions ~~requirements~~in ofservice in the ~~Exchange~~past, ~~Act~~due to such things as power outages, ~~the registrant~~power ~~caused~~equipment ~~this~~failures, ~~report~~cooling toequipment befailures, ~~signed~~routing onproblems, ~~its~~hard ~~behalf~~drive byfailures, ~~the~~database ~~undersigned~~corruption, system failures, software failures, and ~~thereunto~~other ~~duly~~computer ~~authorized~~failures.

			RANCHO SANTA MONICA DEVELOPMENTS INC.
Date:	April 14th , 2009	By:	/s/ Graham G. Alexander
			GRAHAM G. ALEXANDER
			Chief Executive Officer, Chief Financial Officer
			President, Secretary and Treasurer
			(Principal Executive Officer
			and Principal Accounting Officer)

Any future interruptions could:

19 Cause our customers to seek damages for losses incurred;
Require us to replace existing equipment or add redundant facilities;
Damage our reputation as a reliable provider of hosting services;
Cause existing customers to cancel or elect to not renew their contracts; or
Make it more difficult for us to attract new customers.

Any of these events could materially increase our expenses or reduce our revenues, which would have a material adverse effect on our operating results.

If we are unable to maintain a high level of customer service, customer satisfaction and demand for our services could suffer.

We believe that our success depends on our ability to provide customers with quality service that not only meets our stated commitments, but meets and then exceeds customer service expectations. If we are unable to provide customers with quality customer support in a variety of areas, we could face customer dissatisfaction, decreased overall demand for our services, and loss of revenues. In addition, our inability to meet customer service expectations may damage our reputation and could consequently limit our ability to retain existing customers and attract new customers, which would adversely affect our ability to generate revenue and negatively impact our operating results.

We may not be able to continue to add new customers and increase sales to our existing customers, which could adversely affect our operating results.

Our growth is dependent on our ability to continue to attract new customers while retaining and expanding our service offerings to existing customers. Growth in the demand for our services may be inhibited and we may be unable to sustain growth in our customer base, for a number of reasons, such as:

Our inability to market our services in a cost-effective manner to new customers;
The inability of our customers to differentiate our services from those of our competitors or our inability to effectively communicate such distinctions;
Our inability to successfully communicate to businesses the benefits of hosting;
The decision of businesses to host their Internet sites and web infrastructure internally or in colocation facilities as an alternative to the use of our hosting services;
Our inability to penetrate international markets;
Our inability to expand our sales to existing customers;

Our inability to strengthen awareness of our brand; and
Reliability, quality or compatibility problems with our services.

A substantial amount of our past revenue growth was derived from purchases of service upgrades by existing customers. Our costs associated with increasing revenues from existing customers are generally lower than costs associated with generating revenues from new customers. Therefore, a reduction in the rate of revenue increase or a rate of revenue decrease from our existing customers, even if offset by an increase in revenues from new customers, could reduce our operating margins.

Any failure by us to continue attracting new customers or grow our revenues from existing customers for a prolonged period of time could have a material adverse effect on our operating results.

Our existing customers could elect to reduce or terminate the services they purchase from us because we do not have long-term contracts with our customers, which could adversely affect our operating results.

Our customer contracts for our services typically have initial terms of one to two years, which unless terminated, may be renewed or automatically extended on a month-to-month basis. Our customers have no obligation to renew their services after their initial contract periods expire. Moreover, our customers could cancel their service agreements before they expire. Our costs associated with maintaining revenue from existing customers are generally much lower than costs associated with generating revenue from new customers. Therefore, a reduction in revenue from our existing customers, even if offset by an increase in revenue from new customers, could reduce our operating margins. Any failure by us to continue to retain our existing customers could have a material adverse effect on our operating results.

If we fail to hire and retain qualified employees and management personnel, our growth strategy and our operating results could be harmed.

Our growth strategy depends on our ability to identify, hire, train, and retain IT professionals, technical engineers, operations employees, and sales and senior management personnel who maintain relationships with our customers and who can provide the technical, strategic, and marketing skills required for our company to grow. There is a shortage of qualified personnel in these fields, specifically in the San Antonio, Texas area, where we are headquartered and a majority of our employees are located, and we compete with other companies for this limited pool of potential employees. There is no assurance that we will be able to recruit or retain qualified personnel, and this failure could cause our operations and financial results to be negatively impacted.

Our success and future growth also depends to a significant degree on the skills and continued services of our management team, especially Graham Alexander, our Chairman, and Cody McLain, our Chief Executive Officer and President.

Our operating results may fluctuate significantly, which could make our future results difficult to predict and could cause our operating results to fall below investor or analyst expectations.

Our operating results may fluctuate due to a variety of factors, including many of the risks described in this section, which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. You should not rely on our operating results for any prior periods as an indication of our future operating performance. Fluctuations in our revenue can lead to even greater fluctuations in our operating results. Our budgeted expense levels depend in part on our expectations of long-term future revenue. Given relatively fixed operating costs related to our personnel and facilities, any substantial adjustment to our expenses to account for lower than expected levels of revenue will be difficult and take time. Consequently, if our revenue does not meet projected levels, our operating expenses would be high relative to our revenue, which would negatively affect our operating performance.

Increased Internet bandwidth costs and network failures may adversely affect our operating results.

Our success depends in part upon the capacity, reliability, and performance of our network infrastructure, including the capacity leased from our Internet bandwidth suppliers. We depend on these companies to provide uninterrupted and error-free service through their telecommunications networks. Some of these providers are also our competitors. We exercise little control over these providers, which increases our vulnerability to problems with the services they provide. We have experienced and expect to continue to experience interruptions or delays in network service. Any failure on our part or the part of our third-party suppliers to achieve or maintain high data transmission capacity, reliability or performance could significantly reduce customer demand for our services and damage our business.

As our customer base grows and their usage of telecommunications capacity increases, we will continue to need to make additional investments in our capacity to maintain adequate data transmission speeds, the availability of which may be limited or the cost of which may be on terms unacceptable to us. If adequate capacity is not available to us as our customers’ usage increases, our network may be unable to achieve or maintain sufficiently high data transmission capacity, reliability or performance. In addition, our business would suffer if our network suppliers increased the prices for their services and we were unable to pass along the increased costs to our customers.

Many of our current and potential competitors have substantially greater financial, technical and marketing resources, larger customer bases, longer operating histories, greater brand recognition, and more established relationships in the industry than we do. As a result, some of these competitors may be able to:

Develop superior products or services, gain greater market acceptance, and expand their service offerings more efficiently or more rapidly;
Adapt to new or emerging technologies and changes in customer requirements more quickly;
Bundle hosting services with other services they provide at reduced prices;
Take advantage of acquisition and other opportunities more readily;
Adopt more aggressive pricing policies and devote greater resources to the promotion, marketing, and sales of their services; and
Devote greater resources to the research and development of their products and services.

Our acquisitions may divert our management’s attention, result in dilution to our stockholders and consume resources that are necessary to sustain our business.

We have made acquisitions and, if appropriate opportunities present themselves, we may make additional acquisitions or investments or enter into joint ventures or strategic alliances with other companies. Risks commonly encountered in such transactions include:

The difficulty of assimilating the operations and personnel of the combined companies;
The risk that we may not be able to integrate the acquired services or technologies with our current services, products, and technologies;
The potential disruption of our ongoing business;
The diversion of management attention from our existing business;
The inability of management to maximize our financial and strategic position through the successful integration of the acquired businesses;
Difficulty in maintaining controls, procedures, and policies;
The impairment of relationships with employees, suppliers, and customers as a result of any integration;
The loss of an acquired base of customers and accompanying revenue; and
The assumption of leased facilities, other long-term commitments or liabilities that could have a material adverse impact on our profitability and cash flow.

As a result of these potential problems and risks, businesses that we may acquire or invest in may not produce the revenue, earnings, or business synergies that we anticipated. In addition, there can be no assurance that any potential transaction will be successfully identified and completed or that, if completed, the acquired business or investment will generate sufficient revenue to offset the associated costs or other potential harmful effects on our business.

We have and will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, we have and will continue to incur significant legal, accounting, and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules subsequently implemented by the Securities and Exchange Commission, or the SEC, \ have imposed various requirements on public companies, including requiring changes in corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, these new rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantial costs to maintain the same or similar coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

In order to respond to additional regulations applicable to public companies, such as Section 404 of the Sarbanes-Oxley Act, we have hired a number of finance and accounting personnel. We use independent contractors to fill certain positions and provide certain accounting functions. In the future, we may be required to hire additional full-time accounting employees to fill these and other related finance and accounting positions. Some of these positions require candidates with public company experience, and we may be unable to locate and hire such individuals as quickly as needed, if at all. In addition, new employees will require time and training to learn our business and operating processes and procedures. If our finance and accounting organization is unable for any reason to respond adequately to the increased demands resulting from being a public company, the quality and timeliness of our financial reporting may suffer and we could experience internal control weaknesses. Any consequences resulting from inaccuracies or delays in our reported financial statements could have an adverse effect on the trading price of our common stock as well as an adverse effect on our business, operating results, and financial condition.

Competition

There are a number of hotels with which the Company will be forced to compete with in the downtown Financial District in order to obtain sufficient occupancy and room rental rates. Competition from other real estate developers and real estate services companies may adversely affect our ability to:

1. Attract purchasers

2. Sell undeveloped rural land

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

Nature of Investments

Shareholders must rely on the ability, expertise, judgment and discretion of management of the Company. There is no assurance that the Property or investments in the Property made by the Company will perform in a manner which will be profitable to the Company.

Ability for the Company to Raise Sufficient Capital for Development Financing

Shareholders are dependent upon the ability of the Management of the Company to raise sufficient capital or financing to complete the property acquisition and to later obtain the sufficient development financing and capital required to construct the commercial development.

Factors Affecting Property

The Company's success depends upon the success of the development approval process, the ability of the Company to service the land loan, the development financing, and any other costs that come up as they relate to the development process. Property, Economic, governmental, industry and internal factors that detrimentally affect the financial health of the Property will cause a resulting loss of value in the Company's investments.

Possible Loss of Limited Liability

The Company may be carrying on business in jurisdictions other than that under which it was formed. The Company will be registered as an extra-jurisdictional Company in those jurisdictions where the Company is advised that it will be carrying on business by virtue of this Offering or otherwise and where there is provision for registration as an extra jurisdictional Company. However, there is a risk that Unit Holders may not be afforded limited liability in jurisdictions where the Company is not registered to the extent that principles of conflicts of law recognizing the limitation of liability of Unit Holders have not been authoritatively established with respect to Companys formed under laws of one jurisdiction but carrying on business in other jurisdictions.

Reliance on Company

Shareholders will be required to rely on the ability of the Company to actively manage the assets of the Company. The Company will make the actual decisions on the development of the Property upon which the success of the Company will depend. No assurance can be given that the business approaches utilized by the Manager will prove successful. There can be no assurance that satisfactory replacements for Company will be available, if needed. The Company will depend, to a great extent, on the services of a very limited number of individuals of the Company in the administration of the Company's business. The loss of such services for any reason could impair the ability of the Manager Company to perform its advisory activities on behalf of the Company.

Reliance on Executive

The Company will depend extensively on its executive management raise sufficient capital.

Limited Ability to Liquidate Shares

The current market for liquidating the shares and selling the shares is on the Over the Counter Bulletin Board in the United States. Shareholders are also under certain resale restrictions as per rule 144 of the United States Securities Act of 1933. The current market for the shares is illiquid and could be difficult to achieve the current market value for the shares. This Offering of Units is not qualified by way of prospectus, and consequently the resale of Units could be subject to restrictions under applicable securities legislation.

Tax Liability

Each Unit Holder is required to include in computing income, a pro rata share of the income of the Company allocated to him. Income will be allocated to Unit Holders according to the terms of the Company Agreement and without regard to the acquisition price of such Units. Unit Holders may have an income tax liability in respect of profits not distributed and also in respect of returns of capital on the Units exceeding the adjusted cost base of their Units.

Potential Indemnification Obligations

Under certain circumstances, the Company might be subject to significant indemnification obligations in respect of the Company or certain parties related to them. The Company will not carry any Insurance to cover such potential obligations and none of the foregoing parties will be insured for losses for which the Company has agreed to indemnify them. Any indemnification paid by the Company would reduce the Company's net asset value and, by extension, the value of the shares.

Real Property Development and Ownership

Real estate developments and investments are generally subject to varying degrees of risk depending on the nature of the property. Such risks include changes in general economic conditions, government regulation (such as taxation of property and environmental legislation) and the attractiveness of hotel suites to potential purchasers. In addition, each segment in the real estate development industry is capital intensive and is typically sensitive to interest rates. The income generated by the Property in which the Company has an interest is dependent upon general economic conditions and, accordingly, the return to investors may be affected by changes in those conditions. Certain significant expenditures, including property taxes, maintenance costs, mortgage payments, insurance costs and related charges must be made regardless of whether or not a property is producing sufficient income to service such expenses. In addition, the Property of the Company may be subject to mortgages to complete the purchase of a particular Property which require debt service payments. If the Company is unable or unwilling to meet mortgage payments on any property, losses could be sustained as a result of the exercise by the mortgagee of its rights of foreclosure or sale.

Ability to Obtain, Pre-Development Approvals to Allow Future Development on the Property

The Company will be subject to risks associated with the development of the Property such as municipal and government approvals along with potential environmental problems. As a result the ability to develop the Property may be affected from time to time in varying degrees by obtaining or not obtaining the appropriate municipal or government approvals or, alternatively, such approval may be subject to such terms and conditions that may delay or change the Property and thereby altering the profitability of such Property. While management has obtained the necessary predevelopment approvals its past projects, this is NOT a guarantee of future performance.

Construction Costs and Uncertainty of Density

The real estate industry is significantly impacted by fluctuations in the cost of construction and servicing of land. Any material increase in construction and/or servicing costs may have a materially adverse effect on the Company in the timing of selling the Property or having the Company purchase a portion or all of the Property.

Liquidity of Real Estate

Real estate is relatively illiquid. Such illiquidity may limit the ability of the Company to diversify its portfolio promptly in response to changing economic or investment conditions. In recessionary times, it may be virtually impossible to dispose of certain types of real estate, particularly commercial real estate.

The costs of holding real estate are considerable, and the Company, as a holder of real estate, during a recessionary period may be faced with ongoing expenditures with little prospect of incoming receipts. Without adequate cash reserves, it may be necessary for the Company to dispose of Property at low prices. Financial difficulties of other property owners may lead to distress sales which could further depress real estate values in markets in which the Company operates.

Environmental Matters

Under various environmental laws, ordinances and regulations, the current or previous owner or operator of real property may be liable for the costs of removal or rededication of hazardous or toxic substances on, under or in such property. Such laws could impose liability whether or not the Company knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of hazardous or toxic substances, or the failure to remove or rededicate such substances, if any, could adversely affect the Company's ability to sell such real estate or to borrow using such real estate as collateral and could potentially also result in claims against the Company

Property Ownership Risk of Tulum Hotel ParaYso Property

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

Environmental And Other Regulations

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.

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

1.	Civil penalties;
2.	Remediation expenses;
3.	Natural resource damages;
4.	Personal injury damages;
5.	Potential injunctions;
6.	Cease and desist orders; and
7.	Criminal penalties.

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

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

The Occurrence In Mexico Of Natural Disasters

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.

We Do Not Carry Comprehensive Liability Insurance for the Mexico Property.

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

Future Equity Financings May Dilute Existing Stockholders’ Ownership Interests.

There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.

ITEM 3. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, our management carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer has concluded that our disclosure controls and procedures are, as of the date covered by this Quarterly Report, ineffective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5. OTHER INFORMATION.

None.

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

Exhibit
Number	Description of Exhibits
3.1	Articles of Incorporation.⁽¹⁾
3.2	Bylaws, as amended.⁽¹⁾
4.1	Form of Share Certificate.⁽¹⁾
10.6	Purchase Agreement dated for reference November 29, 2004 between Monica Galan-Rios and Rancho Santa Monica Developments Inc.⁽¹⁾
10.7	Promissory Note dated November 29, 2004 Monica Galan-Rios and Rancho Santa Monica Developments Inc.⁽¹⁾
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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

REPORTS ON FORM 8-K

We filed the following Current Reports on Form 8-K during the fiscal quarter ended May 31st, 2009:

Date of Form 8-K	Date of Filing with the SEC	Description of the Form 8-K

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		RANCHO SANTA MONICA DEVELOPMENTS INC.



Date: June X , 2009	By:	/s/ Graham G. Alexander
		GRAHAM G. ALEXANDER
		Chief Executive Officer, Chief Financial Officer
		President, Secretary and Treasurer
		(Principal Executive Officer
		and Principal Accounting Officer)

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