##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number:
    001-32563
  
  ORCHIDS PAPER PRODUCTS
    COMPANY
  A Delaware Corporation
    (State or other jurisdiction of
    incorporation or organization)

23-2956944
    (I.R.S. Employer
    Identification Number)   4826 Hunt Street
 Pryor, Oklahoma 74361
 (Address of principal executive offices)
  Registrants telephone number, including area code:
 (918) 825-0616
  Securities registered pursuant to Section 12(b) of the
    Act:
   Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, $0.001 Par Value

American Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  þ
   o o þ
  o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF
    CONTENTS
   
 PagePart IItem 1.

Business


3Item 1A.

Risk
    Factors


9Item 1B.

Unresolved Staff
    Comments


15Item 2.

Properties


15Item 3.

Legal
    Proceedings


15Item 4.

Submission of
    Matters to a Vote of Security Holders


16Part IIItem 5.

Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


16Item 6.

Selected Financial
    Data


18Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


19Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


34Item 8.

Financial
    Statements and Supplementary Data


35Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


54Item 9A.

Controls and
    Procedures


54Item 9B.

Other
    Information


54Part IIIItem 10.

Directors,
    Executive Officers and Corporate Governance


54Item 11.

Executive
    Compensation


55Item 12.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


55Item 13.

Certain
    Relationships and Related Transactions, and Director
    Independence


55Item 14.

Principal
    Accountant Fees and Services


55Part IVItem 15.

Exhibits and
    Financial Statement Schedules


56Signatures


58SubsidiariesConsent of Independent Registered Public Accounting FirmCertificationCertificationCertification   2




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##### Table of Contents



PART I  Form 10-K
    Item 1.
    BUSINESS  Overview
    of Our Business
  900-mile ® ®
      start-up,
  History
      3-for-2
 3




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##### Table of Contents



Our
    Competitive Strengths
  Focus on supplying value retailers.
  Proximity to key customers.
  Experienced management team and trained
    workforce.
  Low cost tissue manufacturers.
  Our
    Strategy
    
    successfully operating our new paper machine;
    leveraging our existing customer relationships in the value
    retail channel; and
    selectively expanding our customer base in other retail channels.  Installation and Operation of the New Paper
    Machine. start-up
  Leveraging Our Existing Customer Relationships in the Value
    Retail Channel.
 4




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##### Table of Contents



Selectively Expanding Our Customer Base in Other Retail
    Channels.
  Competitive
    Conditions
    900-mile
    Product
    Overview
  ® ® ® ® ® ®
  Customers
   5




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##### Table of Contents



900-mile
    Dollar General.
  Family Dollar.
  Other Customers.
  Sales and
    Marketing Team
       6




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##### Table of Contents



Manufacturing
    three-day
  2006


2005


2004


2003


2002(Tons)Manufactured


31,662



26,051



26,382



26,701



25,683Purchased


6,970



12,153



5,017



3,349



10,363Converted


38,632



38,204



31,399



30,050



36,046       seven-day-a-week
  Distribution
  drop-and-hook
  Raw
    Materials and Energy
   7




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##### Table of Contents



Backlog
    Trademarks
    and Trade Names
  ® ® ® ® ® ®
  Employee
    and Labor Relations
    Environmental,
    Health and Safety Matters
       8




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##### Table of Contents



Executive Officers and Key Employees
    Name

Age

PositionMichael P. Sage


60


Chief Executive Officer and
    President, DirectorKeith R. Schroeder


51


Chief Financial Officer   Michael
    P. Sage, 60, Chief Executive Officer and President,
    Director
  (1995-1998), (1991-1995), (1985-1989).
  Keith
    R. Schroeder, 51, Chief Financial Officer
  (1989-1996) (1978-1989).
  Available
    Information
  1-800-SEC-0330
  Item 1A.
    RISK
    FACTORS   9




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##### Table of Contents



Risks
    Related To Our Business
  We
    face intense competition and if we cannot successfully compete
    in the marketplace, our business, financial condition and
    operating results may be materially adversely
    affected.
      
    aggressive pricing by competitors, which may force us to
    decrease prices in order to maintain market share;
    our ability to maintain and improve plant efficiencies and
    operating rates and lower manufacturing costs;
    the availability, quality and cost of raw materials,
    particularly recycled waste paper and labor; and
    the cost of energy.    A
    substantial percentage of our revenues are attributable to two
    large customers, which may decrease or cease purchases at any
    time.
    We
    have significant indebtedness which limits our free cash flow
    and subjects us to restrictive covenants relating to the
    operation of our business.
   10




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The
    availability of and prices for energy will significantly impact
    our business.
  start-up
  Our
    exposure to variable interest rates may affect our financial
    health.
    We
    depend on our management team to operate the Company and execute
    our business plan.
    We
    exclusively use preconsumer solid bleached sulfate paper, or SBS
    paper, to produce parent rolls and any disruption in our supply
    or increase in the cost of preconsumer SBS paper could disrupt
    our production and harm our ability to produce tissue at
    competitive prices.
  start-up
 11




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Labor
    interruptions would adversely affect our business.
  and/or
  Our
    paper mill may experience shutdowns adversely affecting our
    financial position and results of operations.
        Our
    operations require substantial capital, and we may not have
    adequate capital resources to provide for all of our cash
    requirements.
   12




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##### Table of Contents



We may
    not be able to refinance our bank debt on terms acceptable to
    us.
    Our
    business is subject to extensive governmental regulations and
    any imposition of new regulations or failure to comply with
    existing regulations could involve significant additional
    expense.
    If we
    fail to maintain an effective system of internal controls, we
    may not be able to accurately report our financial results or
    prevent fraud and, as a result, our business could be harmed and
    current and potential stockholders could lose confidence in us,
    which could cause our stock price to fall.
   13




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##### Table of Contents



Risks
    Related To Our Common Stock
  We do
    not pay cash dividends on our capital stock, and we do not
    anticipate paying any cash dividends in the
    future.
    Our
    certificate of incorporation and bylaws, and Delaware law
    contain provisions that could discourage a
    takeover.
    
    discourage, delay or prevent a change in the control of our
    company or a change in our management;
    adversely affect the voting power of holders of common
    stock; and
    limit the price that investors might be willing to pay in the
    future for shares of our common stock.  Our
    future operating results may be below securities analysts
    or investors expectations, which could cause our stock
    price to decline.
    
    our ability to reduce production costs;
    demand for our products; and
    our ability to develop sales and marketing capabilities.    Our
    common stock has only been publicly traded for a short period of
    time, and we expect that the price of our common stock could
    fluctuate substantially, possibly resulting in class action
    securities litigation.
  3-for-2
  
    actual or anticipated variations in our results of operations or
    those of our competitors;
    changes in earnings estimates or recommendations by securities
    analysts or our failure to achieve analysts earnings
    estimates; and
    developments in our industry.   14




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##### Table of Contents



Our
    directors have limited personal liability and rights of
    indemnification from us for their actions as
    directors.
    
    any breach of their duty of loyalty to the corporation or its
    stockholders;
    acts or omissions not in good faith or which involve intentional
    misconduct or a knowing violation of law;
    unlawful payments of dividends or unlawful stock repurchases or
    redemptions; or
    any transaction from which the director derived an improper
    personal benefit.          Item 1B.
    UNRESOLVED
    STAFF COMMENTS    Item 2.
    PROPERTIES  36-acre
  AnnualFacility

Capacity


Sq. Ft.Paper making  three
    machines


14,000 tons



135,000Paper making  new
    machine


33,000 tons



27,000Converting


7,000,000 cases



300,000     Item 3.
    LEGAL
    PROCEEDINGS   15




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##### Table of Contents



Item 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  Item 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Information
  3-for-2
  High


LowYear Ended December 31,
    2005:July 15, 2005 to
    September 30, 2005

$
6.97


$
5.67Fourth Quarter

$
7.03


$
6.43Year Ended December 31,
    2006:First Quarter

$
9.31


$
6.70Second Quarter

$
10.53


$
9.00Third Quarter

$
11.36


$
8.99Fourth Quarter

$
9.34


$
8.20    16




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##### Table of Contents



Performance
    Graph
      
  July 15,2005


December 31, 2005


December 31, 2006Orchids Paper Products Company


$
100



$
120.59



$
150.53Peer Group


$
100



$
93.94



$
120.31S & P Small Cap


$
100



$
101.76



$
115.61S & P Composite 1500
    Paper Products


$
100



$
115.11



$
117.95   Dividends
    Recent
    Sales of Unregistered Securities
   17




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##### Table of Contents



Initial
    Public Offering and Use of Proceeds from Recent Securities
    Offerings
    Repurchase
    of Equity Securities
    Item 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
 18




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##### Table of Contents



Form 10-K.
  Successor


PredecessorTen-Months


Two-Months


Combined


PredecessorYear Ended


Year Ended


Ended


Ended


Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,


February 29,


December 31,


December 31,


December 31,2006


2005


2004


2004


2004


2003


2002(In thousands, except Tons and per Ton data)Net Sales

$
60,190


$
57,700


$
39,736


$
7,191


$
46,927


$
44,524


$
53,202Cost of Sales


53,205



49,769



33,390



6,156



39,546



36,673



44,261Gross Profit


6,985



7,931



6,346



1,035



7,381



7,851



8,941Selling, General and Administrative
    Expenses


4,936



4,629



3,363



1,196



4,559



4,069



4,623Operating Income (Loss)


2,049



3,302



2,983



(161
)


2,822



3,782



4,318Interest Expense


1,980



1,213



1,052



45



1,097



347



574Other (Income) Expense, net


(99
)


(102
)


(5
)






(5
)


19



320Income (Loss) Before Income Taxes


168



2,191



1,936



(206
)


1,730



3,416



3,424Provision (Benefit) for Income Taxes


(564
)


799



642



66



708



1,367



1,026Net Income (Loss)

$
732


$
1,392


$
1,294


$
(272
)

$
1,022


$
2,049


$
2,398Operating DataTons Shipped


39,823



38,204



27,769



4,575



32,344



29,960



36,046Net Selling Price per Ton

$
1,511


$
1,510


$
1,431


$
1,572


$
1,451


$
1,486


$
1,476Total Paper Usage  Tons


38,632



38,204



26,824



4,575



31,399



30,050



36,046Total Paper Cost per Ton

$
788


$
822


$
710


$
671


$
705


$
690


$
701Total Paper Cost

$
31,381


$
31,420


$
19,050


$
3,071


$
22,121


$
20,729


$
25,260Cash Flow DataCash Flow Provided by (Used in):Operating Activities

$
2,607


$
2,644


$
4,722


$
847


$
5,569


$
3,846


$
6,796Investing Activities

$
(18,133
)

$
(19,238
)

$
(19,794
)

$
(112
)

$
(19,906
)

$
(619
)

$
(966
)Financing Activities

$
15,151


$
16,487


$
15,067


$
(445
)

$
14,622


$
(3,247
)

$
(5,622
)   As of December 31,Successor


Predecessor2006


2005


2004


2003


2002Working Capital

$
5,025


$
4,514


$
3,399


$
3,194


$
2,349Net Property, Plant and Equipment

$
58,039


$
42,194


$
24,492


$
14,335


$
15,701Total Assets

$
71,028


$
53,710


$
33,407


$
22,960


$
23,805Long-Term Debt, net of current
    portion

$
31,575


$
17,002


$
15,145


$
4,846


$
7,657Total Stockholders Equity

$
24,704


$
23,712


$
6,941


$
10,050


$
8,001   Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  You should read the following discussion of our financial
    condition and results of operations in conjunction with the
    audited financial statements and the notes to those statements
    included elsewhere in this
    Form 10-K.
    This discussion contains forward-looking statements that involve
    risks and uncertainties. You should specifically
 19




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##### Table of Contents



Executive
    Overview
  What were
    our key 2006 financial results?
  
    Our net sales were $60.2 million in 2006, up 4% from
    $57.7 million in 2005.
    We generated operating income of $2.0 million in 2006, down
    38% from operating income of $3.3 million in 2005.
    Our earnings per diluted share were $0.11 per diluted
    common share in 2006 compared with $0.30 per diluted common
    share in 2005.
    We generated $2.6 million in positive operating cash flow
    in 2006 and have generated positive operating cash flow each of
    the last six years.  What did
    we focus on in 2006?
  start-up ramp-up start-up start-up
    What
    challenges and opportunities did our business face in
    2006?
  start-up ramp-up
    Focusing
    on 2007
   20




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##### Table of Contents



start-up
  Business
    Overview
      
    the market price of our product;
    the cost of recycled waste paper used in producing paper;
    the efficiency of operations in both our paper mill and
    converting plant; and
    energy costs.      Comparative
    Years Ended December 31, 2006, 2005 and 2004
  Net
    Sales
  Successor


PredecessorPeriod from


Period from


CombinedMarch 1 -


January 1 -


Year EndedYear Ended December 31,


December 31,


February 29,


December 31,2006


2005


2004


2004


2004(In thousands, except average price per ton and tons)Net sales

$
60,190


$
57,700


$
39,736


$
7,191


$
46,927Total tons shipped


39,823



38,204



27,769



4,575



32,344Average price per ton

$
1,511


$
1,510


$
1,431


$
1,572


$
1,451    21




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##### Table of Contents



start-up
    Cost of
    Sales
  Successor


PredecessorPeriod from


Period from


CombinedMarch 1 -


January 1 -


Year EndedYear Ended December 31,


December 31,


February 29,


December 31,2006


2005


2004


2004


2004(In thousands, except gross profit margin %)Cost of paper

$
31,381


$
31,420


$
19,050


$
3,071


$
22,121Non-paper materials, labor,
    supplies, etc.


19,570



16,848



13,052



2,701



15,753Sub-total


50,951



48,268



32,102



5,772



37,874Depreciation


2,254



1,501



1,288



384



1,672Cost of sales

$
53,205


$
49,769


$
33,390


$
6,156


$
39,546Gross Profit

$
6,985


$
7,931


$
6,346


$
1,035


$
7,381Gross Profit Margin %


11.6
%


13.7
%


16.0
%


14.4
%


15.7
%     start-up
   22




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##### Table of Contents



Successor


PredecessorPeriod from


Period from


CombinedMarch 1 -


January 1 -


Year EndedYear Ended December 31,


December 31,


February 29,


December 31,2006


2005


2004


2004


2004Paper usage
    (tons)Converted-internal


31,662



26,051



21,976



4,406



26,382Converted-purchased


6,970



12,153



4,848



169



5,017Total converted


38,632



38,204



26,824



4,575



31,399Third-party parent roll sales


1,191







945







945Paper costs per
    tonCost per ton produced internally

$
730


$
729


$
661


$
667


$
662Cost per ton purchased from third
    parties

$
1,062


$
1,024


$
933


$
781


$
928Total cost per ton

$
788


$
822


$
710


$
671


$
705Total paper costs (in
    thousands)Cost of internally produced paper

$
23,979


$
18,979


$
14,526


$
2,939


$
17,465Cost of paper purchased from third
    parties


7,402



12,441



4,524



132



4,656Total paper costs

$
31,381


$
31,420


$
19,050


$
3,071


$
22,121   start-up start-up
   23




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##### Table of Contents



Gross
    Profit
      Selling,
    General and Administrative Expenses
  Successor


PredecessorPeriod from


Period from


CombinedMarch 1 -


January 1 -


Year EndedYear Ended December 31,


December 31,


February 29,


December 31,2006


2005


2004


2004


2004(In thousands, except SG&A as a % of net sales)Commission expense

$
840


$
879


$
661


$
127


$
788Management incentive payments














625



625Other S,G&A expenses


4,096



3,750



2,702



444



3,146Selling, General & Adm exp

$
4,936


$
4,629


$
3,363


$
1,196


$
4,559SG&A as a % of net sales


8.2
%


8.0
%


8.5
%


16.6
%


9.7
%    24




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##### Table of Contents



Operating
    Income
    Interest
    and Other Expense
  Successor


PredecessorPeriod from


Period from


CombinedMarch 1 -


January 1 -


Year EndedYear Ended December 31,


December 31,


February 29,


December 31,2006


2005


2004


2004


2004(In thousands)Interest expense

$
1,980


$
1,213


$
1,052


$
45


$
1,097Other (income) expense, net

$
(99
)

$
(102
)

$
(5
)

$



$
(5
)        25




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##### Table of Contents



Income
    Before Income Taxes
    Income
    Tax Provision (Benefit)
       26




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##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
  Overview
    Form S-1 number 333-124173), 3-for-2
  paid-in-capital); and
  
    direct expenses of $859,000 (charged against additional paid-in
    capital), including legal fees, printing costs, accounting fees,
    qualified independent underwriter fees and other miscellaneous
    direct expenses.         27




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##### Table of Contents



Successor


PredecessorPeriod from


Period from


CombinedMarch 1 -


January 1 -


Year EndedYear Ended December 31,


December 31,


February 29,


December 31,2006


2005


2004


2004


2004(In thousands)Cash Flow DataCash flow provided by (used in):Operating activities

$
2,607


$
2,644


$
4,722


$
847


$
5,569Investing activities

$
(18,133
)

$
(19,238
)

$
(19,794
)

$
(112
)

$
(19,906
)Financing activities

$
15,151


$
16,487


$
15,067


$
(445
)

$
14,622     start-up
           28




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##### Table of Contents




    a $5.0 million revolving credit facility, of which there
    was $3.3 million outstanding as of December 31, 2006,
    on an eligible borrowing base of $5.3 million, which was
    limited to $5.0 million per the terms of the agreement. For
    reporting purposes, as of December 31, 2006,
    $1.8 million of bank overdrafts were included in the
    Long-term debt section of the balance sheet;
    a $14.1 million term loan, with a seven-year amortization
    period, of which there was $11.8 million outstanding as of
    December 31, 2006; and
    a $15.0 million term loan, with a ten-year amortization
    period, of which there was $14.9 million outstanding as of
    December 31, 2006.        4.5-to-1 4.0-to-1 1.20-to-1 1.05-to-1 1.25-to-1
   29




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##### Table of Contents




    a $6.0 million revolving credit facility with a
    3-year term;
    a $10.0 million term loan A with a ten-year term and
    twenty-year amortization;
    a $16.5 million term loan B with a four year-term and
    six-year amortization; and
    a $3.0 million capital expenditures facility with a
    four-year term and a five-year amortization.      Contractual
    Obligations
      Payments Due by PeriodYearsContractual Cash Obligations

Total


1


2 and 3


4 and 5


After 5($ thousands)Long-term debt(1)

$
33,838


$
31,762


$
2,076


$



$
Interest payments(2)(3)

$
1,487


$
1,186


$
301


$



$
Total

$
35,325


$
32,948


$
2,377


$



$
     (1)
    
    This schedule has been prepared based on our existing credit
    facility, which expires on April 30, 2007. A commitment
    letter was received on March 9, 2007 from the Bank of
    Oklahoma, N.A. to
    re-finance
    our existing credit facility, and we expect to close the
    agreement later in March or early in April of 2007.
    Re-financing
    our existing credit facility will extend the
    Long-term
    debt payments shown in the above table. See
    Note 6 
    Long-Term
    Debt and Note 14  Subsequent
    Event to the financial statements in Item 8 in this
    Form 10-K
    for further discussion. Under Orchids revolving credit and
    term loan agreement, the maturity of outstanding debt could be
    accelerated if we do not maintain certain financial covenants.
    At December 31, 2006, we were in compliance with our loan
    covenants, as amended.(2)
    
    These amounts assume interest payments at the year-end borrowing
    amount and rate for our revolving credit facility. The amount
    borrowed in future periods is dependent on our free cash flow
    from
    time-to-time.(3)
    
    Interest payments on the term loans have been calculated based
    on the interest rate in effect as of December 31, 2006. 30




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##### Table of Contents



Critical
    Accounting Policies and Estimates
    Accounts Receivable.
  Inventory. (first-in, first-in,
  New
    Accounting Pronouncements
       31




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##### Table of Contents



®
    Non-GAAP Discussion
          
    it does not reflect our cash expenditures for capital
    expenditures;
    it does not reflect changes in, or cash requirements for, our
    working capital requirements;
    it does not reflect the interest expense, or the cash
    requirements necessary to service interest or principal payments
    on our indebtedness;
    although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized will often have to be
    replaced in the future, and EBITDA does not reflect cash
    requirements for such replacements; and
    other companies, including other companies in our industry, may
    calculate these measures differently than we do, limiting their
    usefulness as a comparative measure. 32




---



##### Table of Contents



Successor


PredecessorPeriod from


Period from


CombinedMarch 1 -


January 1 -


Year EndedYear Ended December 31,


December 31,


February 29,


December 31,2006


2005


2004


2004


2004(In thousands, except  % of net sales)Net income (loss)

$
732


$
1,392


$
1,294


$
(272
)

$
1,022Plus: Interest expense, net


1,980



1,213



1,052



45



1,097Plus: Income tax expense (benefit)


(564
)


799



642



66



708Plus: Depreciation


2,254



1,501



1,288



384



1,672EBITDA

$
4,402


$
4,905


$
4,276


$
223


$
4,499% of net sales


7.3
%


8.5
%


10.8
%


3.1
%


9.6
%       SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K,
  
    our business strategy;
    our value proposition;
    the market opportunity for our products, including expected
    demand for our products;
    our estimates regarding our capital requirements; and
    any of our other plans, objectives, expectations and intentions
    contained in this
    Form 10-K
    that are not historical facts.   33




---



##### Table of Contents




    competition in our industry;
    adverse developments in our relationships with key customers;
    impairment of ability to meet our obligations and restrictions
    on future operations due to our substantial debt;
    availability and price of energy;
    variable interest rate exposure;
    the loss of key personnel;
    disruption in supply or cost of SBS paper;
    labor interruptions;
    natural disaster or other disruption to our facility;
    ability to finance the capital requirements of our business;
    cost to comply with government regulations; and
    failure to maintain an effective system of internal controls
    necessary to accurately report our financial results and prevent
    fraud.  You should read this
    Form 10-K
    completely and with the understanding that our actual results
    may be materially different from what we expect. We undertake no
    duty to update these forward-looking statements after the date
    of this
    Form 10-K,
    even though our situation may change in the future. We qualify
    all of our forward-looking statements by these cautionary
    statements.
  Item 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   34




---



##### Table of Contents



Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  INDEX TO
    FINANCIAL STATEMENTS
  Report of
    Independent Registered Public Accounting Firm


36Balance Sheets as
    of December 31, 2006 and 2005


37Statements of
    Income for the Years ended December 31, 2006 and 2005, the
    Ten-Month Period ended December 31, 2004, and the Two-Month
    Period ended February 29, 2004


38Statements of
    Changes in Stockholders Equity for the Years ended
    December 31, 2006 and 2005, the Ten-Month Period ended
    December 31, 2004, and the Two-Month Period ended
    February 29, 2004


39Statements of Cash
    Flows for the Years ended December 31, 2006 and 2005, the
    Ten-Month Period ended December 31, 2004, and the Two-Month
    Period ended February 29, 2004


40Notes to Financial
    Statements


41-53  35




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           TULLIUS
    TAYLOR SARTAIN & SARTAIN LLP
    36




---



##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  BALANCE
    SHEETS
  As ofDecember 31,


December 31,2006


2005(Dollars in thousands,except share data)ASSETSCurrent assets:Cash

$
3


$
378Accounts receivable, net of
    allowance of $100 in 2006 and $125 in 2005


5,089



4,180Inventories, net


4,379



4,420Restricted certificate of deposit


1,500



1,500Income taxes receivable


1,242



94Prepaid expenses


306



458Deferred income taxes


346



200Total current assets


12,865



11,230Property, plant and equipment


63,081



44,983Accumulated depreciation


(5,042
)


(2,789
)Net property, plant and equipment


58,039



42,194Deferred debt issuance costs, net
    of accumulated amortization of $424 in 2006 and $232 in2005


124



286Total assets

$
71,028


$
53,710LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
3,772


$
2,877Accrued liabilities


1,805



2,137Unrealized loss on forward
    currency exchange contracts






74Current portion of long-term debt


2,263



1,628Total current liabilities


7,840



6,716Long-term debt, net of unamortized
    discount of $74 in 2006 and $101 in 2005


31,575



17,002Deferred income taxes


6,909



6,280Stockholders equity:Common stock, $.001 par
    value, 10,000,000 shares authorized, 6,234,346 shares
    issued and outstanding in 2006 and 2005


6



6Additional paid-in capital


21,139



20,879Common stock warrants


141



141Retained earnings


3,418



2,686Total stockholders equity


24,704



23,712Total liabilities and
    stockholders equity

$
71,028


$
53,710    37




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
 STATEMENTS
    OF INCOME
    Years ended December 31, 2006 and 2005, the Ten-Month
    Period ended December 31, 2004,
    and the Two-Month Period ended February 29, 2004  Successor


PredecessorTen-Months


Two-MonthsYear Ended


Year Ended


Ended


EndedDecember 31,


December 31,


December 31,


February 29,2006


2005


2004


2004(Dollars in thousands, except share and per share data)Net sales

$
60,190


$
57,700


$
39,736


$
7,191Cost of sales


53,205



49,769



33,390



6,156Gross profit


6,985



7,931



6,346



1,035Selling, general and
    administrative expenses


4,936



4,629



3,363



1,196Operating income (loss)


2,049



3,302



2,983



(161
)Interest expense


1,980



1,213



1,052



45Other (income) expense, net


(99
)


(102
)


(5
)


Income (loss) before income taxes


168



2,191



1,936



(206
)Provision (benefit) for income
    taxes:Current


(1,047
)


663



470



(46
)Deferred


483



136



172



112(564
)


799



642



66Net income (loss)

$
732


$
1,392


$
1,294


$
(272
)Net income per share:Basic

$
0.12


$
0.31


$
0.43Diluted

$
0.11


$
0.30


$
0.42Shares used in calculating net
    income per share:Basic


6,234,346



4,453,254



3,000,000Diluted


6,558,454



4,594,412



3,078,807    38




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
 STATEMENTS
    OF CHANGES IN STOCKHOLDERS EQUITY
    Years ended December 31, 2005 and 2006, the Ten-Month
    Period ended December 31, 2004,
    and the Two-Month Period ended February 29, 2004  AdditionalCommon Stock


Paid-in


Common Stock Warrants


RetainedShares


Value


Capital


Shares


Value


Earnings


Total(Dollars in thousands, except share amounts)PredecessorBalance at December 31, 2003


100


$



$
8,001






$



$
2,049


$
10,050Net loss






















(272
)


(272
)Balance at February 29, 2004


100


$



$
8,001






$



$
1,777


$
9,778SuccessorIssuance of Common Stock


728,751


$
1


$
6,049






$



$



$
6,050Valuation of Warrants issued with
    Subordinated Debt














82,607



141







141Valuation of management shares
    issued










103















103Cost of common stock and warrants
    issued










(647
)














(647
)Net income






















1,294



1,294Effect of
    2.744-for-1
    stock split


1,271,249



1



(1
)














Balance at December 31, 2004


2,000,000



2



5,504



82,607



141



1,294



6,941Issuance of Common Stock , net of
    offering expenses of $2,239


2,156,250



2



15,009















15,011Stock based compensation










368















368Net income






















1,392



1,392Balance at December 31, 2005


4,156,250



4



20,881



82,607



141



2,686



23,712Effect of
    3-for-2
    stock split


2,078,096



2



(2
)














Stock based compensation










260















260Net income






















732



732Balance at December 31, 2006


6,234,346


$
6


$
21,139



82,607


$
141


$
3,418


$
24,704    39




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
 STATEMENTS
    OF CASH FLOWS
    Years ended December 31, 2006 and 2005, the Ten-Month
    Period ended December 31, 2004,
    and the Two-Month Period ended February 29, 2004  Successor


PredecessorYear


Year


Ten Months


Two MonthsEnded


Ended


Ended


EndedDecember 31,


December 31,


December 31,


February 29,2006


2005


2004


2004(Dollars in thousands)Cash Flows From Operating
    ActivitiesNet income (loss)

$
732


$
1,392


$
1,294


$
(272
)Adjustments to reconcile net income
    (loss) to net cash provided by operating activities:Depreciation and amortization


2,472



1,688



1,372



386Provision for doubtful accounts


(19
)


46



23



5Deferred income taxes


483



136



172



112Stock based compensation


260



368



103



Foreign currency transaction gain


35



(35
)






Unrealized loss on foreign exchange
    contracts


(74
)


74







Changes in cash due to changes in
    operating assets and liabilities, net of acquisition:Accounts receivable, net


(890
)


(617
)


688



(347
)Inventories


41



(1,372
)


396



344Prepaid expenses


152



(128
)


112



49Income taxes receivable


(1,148
)


188



(167
)


(49
)Accounts payable


895



697



751



133Accrued liabilities


(332
)


207



(22
)


486Net cash provided by operating
    activities


2,607



2,644



4,722



847Cash Flows From Investing
    ActivitiesAcquisition
    of business, net of cash acquired










(14,506
)


Purchases of investment securities
    and restricted certificate of deposit






(17,259
)


(750
)


Proceeds from the sale of
    investment securities






16,509







Purchases of property, plant and
    equipment


(18,133
)


(18,488
)


(4,538
)


(112
)Net cash used in investing
    activities


(18,133
)


(19,238
)


(19,794
)


(112
)Cash Flows From Financing
    ActivitiesProceeds from
    issuance of common stock






17,250



6,050



Cost of common stock and warrants
    issued






(2,239
)


(647
)


Proceeds from issuance of
    subordinated debt and common stock warrants










2,150



Proceeds from issuance of long-term
    debt










17,399



Borrowings under construction loan


15,000











Principal payments on bank debt


(1,586
)


(1,643
)


(9,568
)


(445
)Net borrowings on revolving credit
    line


1,767



3,293







Deferred debt issuance costs


(30
)


(174
)


(317
)


Net cash provided by (used in)
    financing activities


15,151



16,487



15,067



(445
)Net increase (decrease) in cash


(375
)


(107
)


(5
)


290Cash, beginning


378



485



490



200Cash, ending

$
3


$
378


$
485


$
490Supplemental
    Disclosure:Interest paid

$
2,615


$
1,445


$
884


$
48Income taxes paid

$
221


$
475


$
765


$
Supplemental Disclosure of
    Non-Cash Investing and Financing Activities:Contractual obligation for purchase
    of paper machine

$



$
681


$



$
    40




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS
  ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
 December 31, 2006, 2005 and 2004
  Note 1 
    Summary of Significant Accounting Policies
  Basis
    of Presentation
    Business
    Summary
    of Significant Accounting Policies
  Fair
    value of financial instruments
    Accounts
    receivable
    Inventories
  (first-in, first-in,
  Investments
    and restricted certificate of deposit
   41




---



##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   Property,
    plant and equipment
    Impairment
    of long-lived assets
    Income
    taxes
    Deferred
    debt issuance costs
    Discount
    on debt securities issued
    Stock
    splits
  3-for-2 2.744-for-1 2.744-for-1
  Stock
    option expense
  ®
 42




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   Revenue
    recognition
    Shipping
    and handling costs
    Advertising
    costs
    Use of
    estimates
    New
    pronouncements
         43




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    ®
    Note 2 
    Acquisition of Orchids Paper Products Company
   44




---



##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
     ($ thousands)AssetsCurrent assets

$
8,886Property, plant and equipment


21,243Total assets


30,129LiabilitiesCurrent liabilities


2,683Long-term debt


7,092Deferred taxes


5,848Total liabilities


15,623Net assets acquired

$
14,506   step-up
  2004Net income ($ thousands)

$
1,028Earnings per share:Basic

$
0.34Diluted

$
0.33   Note 3 
    Purchase Commitment and Foreign Currency Derivatives
  out-of-pocket
   45




---



##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
     Note 4 
    Inventories
    2006


2005($ thousands)Raw materials

$
1,577


$
1,669Bulk paper rolls


536



1,396Converted finished goods


2,266



1,355$
4,379


$
4,420   Note 5 
    Property, Plant and Equipment
    EstimatedUseful2006


2005


Lives($ thousands)Land

$
379


$
379


Buildings


10,394



3,571


40Machinery and equipment


49,979



20,624


5to30Vehicles


295



131


5Nondepreciable machinery and
    equipment (parts and spares)


1,965



1,751


Construction-in-process


69



18,527


$
63,081


$
44,983   construction-in-process
 46




---



##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   Note 6 
    Long-Term Debt
    2006


2005($ thousands)Revolving line of credit

$
5,060


$
3,293Term note, due in monthly
    installments of $224,000, including interest


11,779



13,288Construction loan, converted to
    term note, due in monthly installments of $192,000, including
    interest


14,923



Subordinated debentures at face
    value less unamortized discount of $74,000 and $101,000 at
    December 31, 2006 and 2005, respectively


2,076



2,04933,838



18,630Less current portion


2,263



1,628$
31,575


$
17,002         4.5-to-1 1.20-to-1, 1.05-to-1 4.0-to-1 1.25-to-1, 4.0-to-1 1.25-to-1
 47




---



##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
       3-for-2
    AnnualPaymentYear

Amount($ thousands)2007

$
2,2632008


2,3482009


4,9072010


6,3382011


7,499after 2011


9,194$
32,549   Note 7 
    Leases
     48




---



##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   Note 8 
    Income Taxes
    2006


2005($ thousands)Deferred income taxes 
    current Inventories

$
311


$
118Prepaid expenses


(125
)


(72
)Accounts receivable


38



48Accrued vacation


122



91Foreign exchange loss






15Deferred income tax
    assets  current

$
346


$
200Deferred income taxes 
    noncurrent Plant and equipment

$
(8,810
)

$
(6,280
)Federal NOL Carryforward


367



State NOL Carryforward, net of
    Federal tax effect


81



State Investment Tax Credit
    Carryforward, net of Federal tax effect


730



Indian Employment Credit
    Carryforward


647



Alternative Minimum Tax Credit
    Carryforward


76



Deferred income tax
    liabilities  noncurrent

$
(6,909
)

$
(6,280
)        49




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
     Ten Months


Two MonthsYear Ended


Year Ended


Ended


EndedDecember 31,


December 31,


December 31,


February 29,2006


2005


2004


2004Statutory tax rate


34.0
%


34.0
%


34.0
%


(34.0
)%State income taxes, net of
    U.S. federal tax benefit


11.9
%


1.2
%


0.0
%


0.9
%Indian employment credits


(87.5
)%


(5.7
)%


(3.0
)%


68.6
%Employee and board stock
    compensation


52.4
%


6.9
%


1.9
%


0.0
%State investment tax credits


(351.8
)%


0.0
%


0.0
%


0.0
%Other


5.3
%


0.1
%


0.3
%


(3.7
)%(335.7
)%


36.5
%


33.2
%


31.8
%     Note 9 
    Earnings per Share
    Year Ended


Year Ended


Ten Months EndedDecember 31,


December 31,


December 31,2006


2005


2004Net income ($ thousands)

$
732


$
1,392


$
1,294Weighted average shares outstanding


6,234,346



4,453,254



3,000,000Effect of Stock Options


166,527



62,441



Effect of dilutive warrants


157,581



78,717



78,807Weighted average shares
    outstanding  assuming dilution


6,558,454



4,594,412



3,078,807Earnings per common share: (2005
    and 2004 restated to reflect
    3-for-2
    stock split) Basic

$
0.12


$
0.31


$
0.43Diluted

$
0.11


$
0.30


$
0.42   Note 10 
    Stock Incentive Plan
   50




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
     ®
    Weighted Average


Weighted Average


AggregateWeighted Average


Fair Value of


Remaining


IntrinsicNumber


Exercise Price


Options Granted


Contractual Life


ValueBalance, December 31, 2004














Granted


416,250


$
5.37


$
2.40



Forfeited


12,000


$
5.33







Balance, December 31, 2005


404,250


$
5.37







9.25 years


$
593,000Granted


18,750


$
9.23


$
3.93



Balance, December 31, 2006


423,000


$
5.53







8.39 years


$
1,269,000Exercisable at December 31,
    2006


189,000











8.47 years


$
535,000Exercisable at December 31,
    2007


267,000











Exercisable at December 31,
    2008


345,000











Exercisable at December 31,
    2009


423,000











      51




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   Note 11 
    Major Customers and Concentration of Credit Risk
      Note 12 
    Employee Incentive Bonus and Retirement Plans
  1 2
    Note 13 
    Related Party Transactions
      Note 14 
    Subsequent Event
    
    a $6.0 million revolving credit facility with a
    3-year term;
    a $10.0 million term loan A with a ten-year term and
    twenty-year amortization; 52




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##### Table of Contents



ORCHIDS
    PAPER PRODUCTS COMPANY
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   
    a $16.5 million term loan B with a four year-term and
    six-year amortization; and
    a $3.0 million capital expenditures facility with a
    four-year term and a five-year amortization.      Note 15 
    Selected Quarterly Financial Data (Unaudited)
  2006First Quarter


Second Quarter


Third Quarter


Fourth Quarter(Dollars in thousands, except per share data)Sales

$
14,099


$
13,675


$
15,154


$
17,262Gross Profit

$
1,563


$
1,006


$
1,857


$
2,559Operating Income (Loss)

$
315


$
(275
)

$
733


$
1,276Net Income (Loss)

$
182


$
(293
)

$
(151
)

$
994Basic Earnings (Loss) per share

$
0.03
*

$
(0.05
)

$
(0.02
)

$
0.16Diluted Earnings (Loss) per share

$
0.03
*

$
(0.05
)

$
(0.02
)

$
0.15Price per common shareHigh

$
9.31
*

$
10.53


$
11.36


$
9.34Low

$
6.70
*

$
9.00


$
8.99


$
8.20   2005First Quarter


Second Quarter


Third Quarter


Fourth Quarter(Dollars in thousands, except per share data)Sales

$
12,542


$
13,681


$
15,435


$
16,042Gross Profit

$
1,817


$
1,981


$
2,263


$
1,870Operating Income

$
858


$
773


$
1,029


$
642Net Income

$
346


$
114


$
480


$
452Basic Earnings per share

$
0.11
*

$
0.04
*

$
0.09
*

$
0.07
*Diluted Earnings per share

$
0.11
*

$
0.04
*

$
0.09
*

$
0.06
*Price per common shareHigh


n/a



n/a


$
6.97
*

$
7.03
*Low


n/a



n/a


$
5.67
*

$
6.43
*     *
    
    Earnings per share and Price per common share have been restated
    to reflect the
    3-for-2
    stock split effected in July 2006. 53




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##### Table of Contents



Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES  (a)
    Disclosure
    Controls and Procedures:  Rules 13a-15(e) 15d-15(e)
  (b)
    Internal
    Control Over Financial Reporting    Item 9B.
    OTHER
    INFORMATION   PART III  Item 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE      Regulation S-K
    (918) 825-0616
 54




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##### Table of Contents



Item 11.
    EXECUTIVE
    COMPENSATION    Item 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Securities
    Authorized for Issuance Under Equity Compensation Plan
  Number of SecuritiesRemaining Available forFuture Issuance UnderNumber of Securities to


Weighted-Average


Equity Compensationbe Issued Upon Exercise


Exercise Price of


Plans (Excludingof Outstanding Options


Oustanding Options,


Securities Reflected inWarrants and Rights


Warrants and Rights


Column (a)Plan Category

(a)


(b)


(c)Equity compensation plans approved
    by security holders


423,000


$
5.54



274,500Equity compensation plans not
    approved by security holders


225,000


$
6.40



Total


648,000







274,500   Item 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Regulation S-K
  Regulation S-K
  Item 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   55




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##### Table of Contents



PART IV  Item 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES    Form 10-K.
     56




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##### Table of Contents



Orchids
    Paper Products Company
    Schedule II  Valuation and Qualifying
    Accounts
    Years ended December 31, 2006 and 2005, the Ten-month
    Period ended
    December 31, 2004, and the Two-month Period ended
    February 29, 2004
  AdditionsChargedBalance at


(Credited) to


Deductions


Balance atBeginning of


Costs and


Describe


End ofPeriod


Expenses


(1)(2)


Period(In thousands)Accounts Receivable
    Reserve:Year ended December 31, 2006Bad Debt Reserve

$
125


$
(19
)

$
6


$
100Year ended December 31, 2005Bad Debt Reserve

$
90


$
46


$
11


$
125Ten-month period ended
    December 31, 2004Bad Debt Reserve

$
105


$
23


$
38


$
90Two-month period ended
    February 29, 2004Bad Debt Reserve

$
100


$
5


$



$
105Inventory Valuation
    Reserve:Year ended December 31, 2006Inventory Valuation Reserve

$
24


$
45


$
44


$
25Year ended December 31, 2005Inventory Valuation Reserve

$
39


$



$
15


$
24Ten-month period ended
    December 31, 2004Inventory Valuation Reserve

$
27


$
12


$



$
39Two-month period ended
    February 29, 2004Inventory Valuation Reserve

$
27


$



$



$
27     (1)
    
    Write-off of uncollectible accounts, net of recoveries(2)
    
    Write-off of obsolete inventory and physical inventory
    adjustments     57




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##### Table of Contents



SIGNATURES      By:
    /s/  Michael
    P. Sage     By:
    /s/  Keith
    R. Schroeder       POWER OF
    ATTORNEY
  attorneys-in-fact Form 10-K attorney-in-fact
    Signatures

Title

Date/s/  Douglas
    E. HaileyDouglas
    E. Hailey

Chairman of the Board of Directors

March 19, 2007/s/  Michael
    P. SageMichael
    P. Sage

Chief Executive Officer and
    Director
    (Principal Executive Officer)

March 19, 2007/s/  Gary
    P. ArnoldGary
    P. Arnold

Director

March 19, 2007/s/  Steven
    BerlinSteven
    Berlin

Director

March 19, 2007/s/  John
    G. GuttillaJohn
    G. Guttilla

Director

March 19, 2007/s/  Jeff
    SchoenJeff
    Schoen

Director

March 19, 2007/s/  Jay
    ShusterJay
    Shuster

Director

March 19, 2007/s/  Keith
    R. SchroederKeith
    R. Schroeder

Chief Financial Officer
    (Principal Financial and
    Accounting Officer)

March 19, 2007  58




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##### Table of Contents



Exhibit Index
  EXHIBITS
  3
.1

Amended and Restated Certificate
    of Incorporation of the Registrant, incorporated by reference to
    Orchids Paper Products Company
    Form S-1
    (File
    No. 333-124173)
    dated April 19, 2005, exhibit 3.1.3
.2

Amended and Restated Bylaws of the
    Registrant, incorporated by reference to Orchids Paper Products
    Company
    Form S-1
    (File
    No. 333-124173)
    dated April 19, 2005, exhibit 3.2.4
.1

Specimen Stock Certificate,
    incorporated by reference to Orchids Paper Products Company
    Form S-1
    (File No.
    333-124173)
    dated June 24, 2005, exhibit 4.1.4
.2

Form of Subordinated Debenture,
    incorporated by reference to Orchids Paper Products Company
    Form S-1
    (File
    No. 333-124173)
    dated April 19, 2005, exhibit 4.8.10
.1

Amended and Restated Management
    Services Agreement, dated April 19, 2005, between Weatherly
    Group, LLC, Taglich Brothers, Inc. and the Registrant,
    incorporated by reference to Orchids Paper Products Company
    Form S-1
    (File
    No. 333-124173)
    dated April 19, 2005, exhibit 10.1.10
.2#

2005 Stock Incentive Plan,
    incorporated by reference to Orchids Paper Products Company
    Form S-1
    (File No.
    333-124173)
    dated April 19, 2005, exhibit 10.2.10
.3#

Employment Agreement dated
    March 1, 2004, between Michael P. Sage and the Registrant,
    incorporated by reference to Orchids Paper Products Company
    Form S-1
    (File
    No. 333-124173)
    dated April 19, 2005, exhibit 10.3.10
.4#

Employment Agreement dated
    March 1, 2004, between Keith R. Schroeder and the
    Registrant, incorporated by reference to Orchids Paper Products
    Company
    Form S-1
    (File
    No. 333-124173)
    dated April 19, 2005, exhibit 10.4.10
.5#

Form of Indemnification Agreement
    between Registrant and each of its Directors and Officers,
    incorporated by reference to Orchids Paper Products Company
    Form S-1/A
    (File
    No. 333-124173)
    dated June 1, 2005, exhibit 10.5.10
.6

Form of Warrant issued by Orchids
    Acquisition Group, Inc. in connection with the acquisition of
    Orchards Paper Products Company, incorporated by reference to
    Orchids Paper Products Company
    Form S-1
    (File No.
    333-124173)
    dated April 19, 2005, exhibit 10.6.10
.7

Form of Warrant issuable to
    designees of the Underwriter, incorporated by reference to
    Orchids Paper Products Company
    Form S-1/A
    (File No.
    333-124173)
    dated June 1, 2005, exhibit 10.7.10
.8

Purchasing documents for tissue
    machine, incorporated by reference to Orchids Paper Products
    Company
    Form S-1
    (File
    No. 333-124173)
    dated April 19, 2005, exhibit 10.8.10
.9

Amended and Restated Agented
    Credit Agreement, dated as of June 24, 2005, among the
    Registrant, Bank of Oklahoma, N.A., BancFirst and Commerce Bank,
    N.A., incorporated by reference to Orchids Paper Products
    Company
    Form S-1
    (File
    No. 333-124173)
    dated June 24, 2005, exhibit 4.9.10
.10

Amendment One to Amended and
    Restated Agented Credit Agreement dated June 30, 2006,
    among the Registrant, Bank of Oklahoma, N.A., BancFirst and
    Commerce Bank, N.A., incorporated by reference to Orchids Paper
    Products Company
    Form 10-Q
    (File No. 001-32563) dated August 4, 2006, exhibit 4.1.10
.11

Amendment Two to Amended and
    Restated Agented Credit Agreement dated June 30, 2006,
    among the Registrant, Bank of Oklahoma, N.A., BancFirst and
    Commerce Bank, N.A., incorporated by reference to Orchids Paper
    Products Company
    Form 10-Q
    (File No. 001-32563) dated November 3, 2006,
    exhibit 4.1.21


Subsidiaries of the Company.23
.1

Consent of Independent Registered
    Public Accounting Firm   Tullius Taylor
    Sartain & Sartain LLP.31
.1

Certification pursuant to
    Section 302(a) of the Sarbanes-Oxley Act of 2002.31
.2

Certification pursuant to
    Section 302(a) of the Sarbanes-Oxley Act of 2002.32


Certification pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     #
    
    Indicates management contract or compensatory plan 59