U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2008

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period:

Commission File No. 000-51674

LANE CO. #5, INC.

(Exact name of small business issuer as specified in its charter)

Delaware		20-3771307
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2425 Post Road, Suite 205

Southport, CT 06890-1267

(Address of Principal Executive Offices)

203-255-0341

(Issuer’s telephone number)

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

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of January 13, 2009: 100,000 shares of common stock.

Part I

Item 1 - Financial Statements

LANE CO #5, INC. A DEVELOPMENT STAGE COMPANY BALANCE SHEETS

	December 31, 2008			September 30, 2008
	(Unaudited)			(Audited)

Assets

Total assets	$	—		$	—

LIABILITIES AND STOCKHOLDER’S EQUITY

Current liabilities
Accounts payable		10,325			9,450

Total liabilities		10,325			9,450

Commitment and contingencies		—			—

Stockholder’s equity (deficit)
Preferred stock, $.0001 par value,
authorized 10,000,000 shares, none issued		—			—
Common stock, $.0001 par value,
authorized 100,000,000 shares
100,000 issued and outstanding		10			10
Additional paid-in capital		6,990			6,990
Deficit accumulated during the development stage		(17,325	)		(16,450	)

Total stockholder’s equity (deficit)		(10,325	)		(9,450	)

Total liabilities and stockholder’s equity (deficit)	$	—		$	—

The financial information presented herein has been prepared by management without audit by independent certified public accountants

See accompanying notes

LANE CO #5, INC. A DEVELOPMENT STAGE COMPANY STATEMENTS OF OPERATIONS

	For the three months ended December 31, 2008			For the three months ended December 31, 2007			For the period November 2, 2005 (Inception) to December 31, 2008

Net sales	$	—		$	—		$	—

Cost of sales		—			—			—

Gross profit		—			—			—

General and administrative expenses		875			875			17,325

Net loss	$	(875	)		(875	)	$	(17,325	)

Weighted average number of common shares outstanding (basic)		100,000			100,000			100,000
Basic and diluted (loss) per common share	$	(0.009	)	$	(0.009	)	$	(0.173	)

The financial information presented herein has been prepared by management without audit by independent certified public accountants.

See accompanying notes

LANE CO #5, INC. A DEVELOPMENT STAGE COMPANY STATEMENTS OF CASH FLOWS

	For the three months ended December 31, 2008			For the three months ended December 31, 2007			For the period November 2, 2005 (Inception) to December 31, 2008

Cash flows from operating activities
Net (loss)	$	(875	)	$	(875	)	$	(17,325	)

Adjustments to reconcile net (loss) to net
cash used in operating activities:
Increase (decrease) in accounts payable		875			875			10,325

Net cash (used in) operating activities		—			—			(7,000	)

Cash flows from financing activities
Proceeds from issuance of common stock		—			—			7,000

Net cash provided by financing activities		—			—			7,000

Net increase in cash and cash equivalents		—			—			—

Cash - beginning of period		—			—			—

Cash - end of period	$	—		$	—		$	—

Supplemental disclosure of cash flow information:
Taxes paid		—			—			—
Interest paid	$	—		$	—		$	—

The financial information presented herein has been prepared by management without audit by independent certified public accountants

LANE CO #5, INC.

(a corporation in the development stage)

Notes to Financial Statements

December 31, 2008

Unaudited

NOTE 1 – Organization

Lane Co #5, Inc. (“the Company”) was incorporated in State of Delaware on November 2, 2005 and is currently in its development stage.

On December 15, 2005 the Company filed a Registration Statement on Form 10SB to have its common stock, par value $0.0001 registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (“the Exchange Act”). In accordance with the provisions of the Exchange Act such Registration Statement became effective on February 13, 2006.

As a blank check company, the Company’s business is to pursue a business combination through acquisition, or merger with, an existing company. On December 23, 2008, the Company entered into a Letter of Intent with Volcano Source Acquisition USA, Inc, a Delaware corporation, relating to a proposed reverse merger transaction between the parties. See Note 7 to these financial statements for this subsequent event, which was disclosed in Form 8-K on December 29, 2008.

NOTE 2 – Summary of Significant Accounting Policies

The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States.

Significant accounting policies are as follows:

Use of Estimates

The preparation of the statement of financial condition in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of financial condition and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. For the period November 2, 2005 (inception) through December 31, 2008, the Company did not maintain a bank account.

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting basis and tax basis of the assets and liabilities and are measured using enacted tax rates that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized. See Note 5.

Loss per Common Share

Loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period as required by the Financial Accounting Standards Board (FASB) under Statement of Financial Accounting Standards (SFAS) No. 128.

New Accounting Pronouncement

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 (“FAS 157”), Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. FAS 157 applies under other accounting pronouncements that require or permit fair value measurements. Prior to FAS 157, there were different definitions of fair value and limited guidance for applying those definitions in GAAP. Moreover, that guidance was dispersed among the many accounting pronouncements that require fair value measurements. Differences in that guidance created inconsistencies that added to the complexity in applying GAAP. The changes to current practice resulting from the application of FAS 157 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. As of December 31, 2008, the Company does not expect the adoption of FAS 157 to have an effect on its financial statements.

NOTE 3 – Preferred Stock

The Company is authorized to issue 10,000,000 shares of preferred stock. The Preferred Stock of the Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Company may determine, from time to time. As of December 31, 2008, the Company had no outstanding preferred stock.

NOTE 4 – Common Stock

The Company is authorized to issue 100,000,000 shares of Company Stock. On November 2, 2005, the Company issued 100,000 shares of Common Stock for total consideration of $7,000 to the sole shareholder of the Company.

Holders of shares of Common Stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

NOTE 5 – Income Taxes

The Company has $6,930 in gross deferred tax assets at December 31, 2008 resulting from net operating loss carry-forwards. A valuation allowance has been recorded to fully offset these deferred tax assets because the future realization of the related income tax benefits is uncertain. Accordingly, the net provision for income taxes is zero for the period November 02, 2005 (inception) to December 31, 2008. At December 31, 2008, the Company has federal net operating loss carry forwards of approximately $17,325 available to offset future taxable income through 2028. The difference between the tax provision at the statutory federal income tax rate and the tax provision attributable to loss before income taxes is as follows (in percentages):

	For the period November 2, 2005 (inception) through December 31, 2008
Statutory federal income taxes		-34.0	%
State taxes, net of federal benefits		-5.0	%
Valuation allowance		39.0	%

Income tax rate		0.0	%

NOTE 6 – Going Concern

The Company’s financial statements have been presented on the basis that it is a going concern in the development stage, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

For the period from November 2, 2005 (inception) to December 31, 2008, the Company incurred losses of $17,325.

The ability of the Company to continue as a going concern is dependent upon its ability to find a suitable acquisition/merger candidate, raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.

NOTE 7 – Subsequent Event

On December 23, 2008, Lane Co, #5, Inc., (the “Company”) entered into a Letter of Intent (the “Letter of Intent”) with Volcano Source Acquisition USA, Inc. (“Volcano Source”), a Delaware corporation, relating to a proposed reverse merger transaction between the parties (the “Reverse Merger”). Under the proposed transaction, the outstanding capital stock of Volcano Source would be exchanged for shares of common stock of the Company in a Reverse Merger, resulting in Volcano Source becoming a wholly-owned subsidiary of the Company. Volcano Source is in the process of becoming a holding company for and formed at the direction of, Wu Da Lian Zhi Volcanic Bio-Technology Co. Ltd., a limited liability company registered in the People’s Republic of China, and manufacturer and distributor of natural mineral water. It is currently contemplated that the Company will not maintain any of its assets after the Reverse Merger, but that all assets after the Reverse Merger will be those acquired from Volcano Source as a result of the Reverse Merger.

The Letter of Intent contemplates that all of the Company’s officers and directors would resign at closing, and be replaced by officers and directors of Volcano Source. The shareholders of Volcano Source would also be issued greater than 80% of the Company’s issued and outstanding shares of voting capital stock, and would therefore effectively have control over the Company after the consummation of the Reverse Merger.

In the event that the Company has not consummated a Reverse Merger with Volcano Source on or before April 22, 2009, and the parties have not mutually agreed to extend this date, the negotiations with Volcano Source will be terminated and the Company will not enter into the Reverse Merger. The Letter of Intent also provides for earlier termination if the Company does not become current in its reporting obligations under the Securities Exchange Act of 1934, as amended, by January 31, 2009.

Volcano Source will provide a $20,000 refundable deposit if the Company does become current in its SEC reporting obligations by January 31, 2009, and refundable if the Company fails to maintain its SEC reporting obligations during the term of the Letter of Intent. The deposit will be applied toward the purchase price at closing. The parties have also agreed that until the later of April 22, 2009, or 31 days after the termination of the Letter of Intent, that the Company may not solicit or entertain offers from any other parties relating to the acquisition of the Company and must immediately notify Volcano Source regarding any contact between the Company, any of its officers, directors or shareholders, or any of their respective representatives, and any other person regarding any such offer or proposal or any related inquiry. Furthermore, the Company and Volcano Source have agreed to maintain the confidentiality of any information provided to it by the other party.

Except for the terms described in the immediately preceding paragraph relating to an exclusive dealing period, and maintaining confidentiality, along with the term of the Letter of Intent, the Company and Volcano Source have acknowledged that the terms set forth in the Letter of Intent are not binding on either party until the parties have entered into a definitive merger agreement. As of the date of these financial statements, the parties have commenced their respective due diligence reviews, and have not yet begun to draft any of the definitive agreements.

There can be no assurances that a Reverse Merger or any similar transaction contemplated under the terms of the Letter of Intent will ever be consummated.

Item 2. Management’s Discussion and Analysis or Plan of Operation

Plan of Operation

The Company has not realized any revenues from operations since inception, and its plan of operation for the next twelve months is to locate a suitable acquisition or merger candidate and consummate a business combination. The Company may need additional cash advances from its stockholder or loans from other parties to pay for operating expenses until the Company consummates a merger or business combination with a privately-held operating company. Although it is currently anticipated that the Company can satisfy its cash requirements with additional cash advances or loans from other parties, if needed, for at least the next twelve months, the Company can provide no assurance that it can continue to satisfy its cash requirements for such period.

Since our formation on November 2, 2005, our purpose has been to effect a business combination with an operating business which we believe has significant growth potential. We are currently considered to be a “blank check” company in as much as we have no specific business plans, no operations, revenues or employees. We currently have no definitive agreements or understanding with any prospective business combination candidates and have not targeted any business for investigation and evaluation nor are there any assurances that we will find a suitable business with which to combine. The implementation of our business objectives is wholly contingent upon a business combination and/or the successful sale of securities in the company.

As a result of our limited resources, we expect to effect only a single business combination. Accordingly, the prospects for our success will be entirely dependent upon the future performance of a single business. Unlike certain entities that have the resources to consummate several business combinations or entities operating in multiple industries or multiple segments of a single industry, we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. A target business may be dependent upon the development or market acceptance of a single or limited number of products, processes or services, in which case there will be an even higher risk that the target business will not prove to be commercially viable.

Our officers and directors are only required to devote a very limited portion of their time to our affairs on a part-time or as-needed basis. We expect to use outside consultants, advisors, attorneys and accountants as necessary, none of which will be hired on a retainer basis. We do not anticipate hiring any full-time employees so long as we are seeking and evaluating business opportunities.

We expect our present management to play no managerial role in the Company following a merger or business combination. Although we intend to scrutinize closely the management of a prospective target business in connection with our evaluation of a business combination with a target business, our assessment of management may be incorrect. We cannot assure you that we will find a suitable business with which to combine.

Results of Operations

General The Company has not conducted any active operations since inception, except for its efforts to locate a suitable acquisition or merger transaction. No revenue has been generated by the Company during such period, and it is unlikely the Company will have any revenues unless it is able to effect an acquisition of or merger with another operating company, of which there can be no assurance.

Revenues For the period from November 2, 2005 (Inception) to December 31, 2008 the Company had no activities that produced revenues from operations.

For the three months ended December 31, 2008 compared to the three months ended December 31, 2007:

Net Loss For the three months ended December 31, 2008; the Company realized a loss of $875 as compared to a loss of $875 for the three months ended December 31, 2007. These losses are comprised of having no revenue along with accounting and SEC filing fees incurred in relation to the filing of the Company’s quarterly reports filed with the SEC.

General and Administrative Expenses For the three months ended December 31, 2008, the Company realized $875 in accounting and SEC filing fees as compared to $875 for the three months ended December 31, 2007.

For the period from November 2, 2005 (Inception) to December 31, 2008, the Company realized a loss of $17,325.

Liquidity and Capital Resources

As of December 31, 2008, the Company had no assets. The Company’s current liabilities as of December 31, 2008 totaled $10,325 comprised of SEC audit and filing fees.

The following is a summary of the Company’s cash flows from operating, investing, and financing activities:

	For the period November 2, 2005 (Inception) to December 31, 2008

Used in operating activities	$	(7,000	)
Provided by financing activities	$	7,000

Net effect on cash	$	—

The Company has no assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Subsequent Events

There can be no assurances that a Reverse Merger or any similar transaction contemplated under the terms of the Letter of Intent will ever be consummated.

Item 3. Quantitative and Qualitative Disclosures abut Market Risk

N/A

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2008 that our disclosure controls and procedures were effective at the reasonable assurance level due to the material weaknesses in our internal controls over financial reporting discussed immediately below.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment. The internal controls for the Company are provided by executive management’s review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:

(1)	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

(2)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and

(3)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits us to provide only management’s report in this quarterly report.

Identified Material Weaknesses

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. As of December 31, 2008, the Company had yet to commence operations, maintain a bank account or commence any business activity.

Conclusion

As a result of management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2008, management has concluded that our internal control over financial reporting is effective.

These procedures were completed so management could gain assurance that the financial statements and schedules included in this Form 10-Q fairly present in all material respects the financial position, results of operations and cash flows for the periods presented.

Item 4T. Controls and Procedures

The registrant qualifies as a smaller reporting company, as defined by Rule 229.10(f)(1), therefore, is not required to provide the information required by this Item.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is currently not a party to any pending legal proceedings and no such action by or to the best of its knowledge, against the Company has been threatened.

Item 1A. Risk Factors

The registrant qualifies as a smaller reporting company, as defined by Rule 229.10(f)(1), therefore, is not required to provide the information required by this Item.

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.

No matter was submitted during the quarter ended December 31, 2008, covered by this report to a vote of the Company’s shareholders, through the solicitation of proxies or otherwise.

Item 5. Other Information.

None

Item 6. Exhibits and Reports of Form 8-K.

(a) Exhibits

	31.1	Certification pursuant to Section 312 of Sarbanes Oxley Act of 2002

	32.1	Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002

(b) Reports of Form 8-K

None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized.

	Lane Co #5, Inc.

Date: January 13, 2009	By:	/s/ John D. Lane
		John D. Lane, President and Chief Executive Officer
		Principal Executive Officer Principal Financial Officer

LANE CO 5 INC 10-Q