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**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-QSB**





(Mark
      One)





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


For
        the
        quarterly period ended **April
        30, 2007**




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For
        the
        transition period from _________ to
        _________


Commission
        file number 333-115053




**Guilin
                Paper, Inc.**
              
              (Exact
                name of small business issuer as specified in its
                charter)**Nevada**
              (State
                or other jurisdiction of incorporation or organization)
            **09-0420135**
              (IRS
                Employer Identification No.)**Yu
                Lei Bay, Lipu,**
              **Guangxi,
                P.R. China**
              (Address
                of principal executive offices)**86-773-723
                3098**
              (Issuer’s
                telephone number)**LogSearch,
                Inc.**
              (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




As
      of
      June 15, 2007 the registrant had 48,077,968  shares
      of
      common stock outstanding.





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





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









**INDEX**


**Page
                  No.**PART
                  1 - FINANCIAL INFORMATIONItem
                  1. Financial Statements
              1Balance
                  Sheets as of April 30, 2007 (unaudited) and
                  October 31, 2006
              3Statements
                  of Operations for the Six Months Ended
                  April 30, 2007 and 2006 (unaudited)
              4Statements
                  of Income for the Three MonthsEnded
                  April 30, 2007 and 2006
              5Statements
                  of Cash Flows for the Six Months Ended
                  April 30, 2007 and 2006 (unaudited)
              6Statement
                  of Stockholders’ Equity for the Periods Ended
                  April 30, 2007 and October 31, 2006 (unaudited)
              7Notes
                  to Financial Statements
              8
                  -
                  19Item
                  2.Management’s
                  Discussion and Analysis Or Plan of Operations
              20Item
                  3. Controls and Procedures
              22PART
                  II - OTHER INFORMATIONItem
                  1. Legal Proceedings
              23Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds
              23Item
                  3. Defaults Upon Senior Securities
              23Item
                  4. Submission of Matters to a Vote of Security Holders
              23Item
                  5. Other Information
              23Item
                  6. Exhibits
              23SIGNATURES
              24













**PART
      1 - FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**





**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**





**CONSOLIDATED
      FINANCIAL STATEMENTS**





**APRIL
      30, 2007**




**TABLE
      OF CONTENTS**




Report
                of Independent Registered Public Accounting Firm
            
            
            2Consolidated
                Balance Sheets
            
            
            3Consolidated
                Statements of Income
            
            
            4
                - 5Consolidated
                Statements of Cash Flows
            
            
            6Consolidated
                Statements of Stockholders Equity
            
            
            7Notes
                to Consolidated Financial Statements
            
            
            8
                - 19




1




***MORGENSTERN,
      SVOBODA, & BAER, CPA’s, P.C.***




*CERTIFIED
      PUBLIC ACCOUNTANTS*


40
      Exchange Place, Suite 1820


New
      York,
      NY 10005


TEL:
      (212) 925-9490


FAX:
      (212) 226-9134


E-MAIL:
      MSBCPAS@GMAIL.COM





Board
      of
      Directors and Stockholders of


Guilin
      Paper, Inc.





We
      have
      reviewed the accompanying consolidated balance sheet of Guilin Paper, Inc.
      (formerly Logsearch, Inc.), (“The Company”) as of April 30, 2007 and October 31,
      2006, and the related consolidated statements of income, comprehensive losses,
      statement of stockholders' equity, and cash flows for the six months then ended.
      These financial statements are the responsibility of the Company's management.
      Our responsibility is to express an opinion on these financial statements based
      on our audit.




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





Based
      on
      our reviews, we are not aware of any material modifications that should be
      made
      to the accompanying interim financial statements referred to above for them
      to
      be in conformity with accounting principles generally accepted in the United
      States of America.





Morgenstern,
      Svoboda & Baer, CPAs, P.C.


Certified
      Public Accountants





New
      York,
      NY


June
      15,
      2007




2




**GUILIN
                PAPER, INC.**
              **(Formerly
                Logsearch, Inc.)****CONSOLIDATED
                BALANCE SHEET****S****APRIL
                30, 2007 AND OCTOBER 31, 2006**




**ASSETS**
            
            **04/30/2007**
            
            **10/31/2006****Current
                Assets**Cash
                and cash equivalents
            
            $
            181,290
            
            $
            185,192Accounts
                receivable, net
            
            
            12,816,509
            
            
            13,875,434Notes
                receivable
            
            
            549,962
            
            
            470,817Inventory
            
            
            3,479,511
            
            
            3,558,716Other
                receivables, net
            
            
            1,903,830
            
            
            1,460,398Trade
                deposits
            
            
            4,592,682
            
            
            3,936,394Prepaid
                expenses
            
            
            74,235
            
            
            61,351Total
                Current Assets
            
            
            23,598,019
            
            
            23,548,302**Property
                & equipment, net**
            
            
            14,000,744
            
            
            14,162,422**Other
                Assets**Intangibles
            
            
            2,558,753
            
            
            2,590,161Other
                assets
            
            
            36,403
            
            
            36,403Total
                Other Assets
            
            
            16,595,900
            
            
            16,788,986**Total
                Assets**
            
            $
            40,193,919
            
            $
            40,337,288**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                LiabilitiesNotes
                payable - current
            
            $
            12,905,496
            
            $
            12,654,944Accounts
                payable and accrued expenses
            
            
            3,245,702
            
            
            7,169,715Interest
                payable
            
            
            6,222,630
            
            
            5,803,345Customer
                advances
            
            
            3,126,324
            
            
            1,284,985Income
                tax payable
            
            
            126,314
            
            
            1,365,942Total
                Current Liabilities
            
            
            25,626,466
            
            
            28,278,931Long
                Term DebtsNotes
                payable - net of current portion
            
            
            654,082
            
            
            652,951**Stockholders'
                Equity**Common
                stock, 75,000,000 Authorized .001 Par Value,48,077,968
                Issued & Outstanding
            
            
            48,078
            
            
            48,078Additional
                paid in capital
            
            
            7,762,198
            
            
            7,762,198Statutory
                reserves
            
            
            5,246,450
            
            
            4,193,528Other
                comprehensive income
            
            
            (615,922
            )
            
            (534,436
            )Retained
                earnings
            
            
            1,474,567
            
            
            (63,961
            )Total
                Stockholders' Equity
            
            
            13,915,371
            
            
            11,405,407Total
                Liabilities and Stockholders' Equity
            
            $
            40,195,919
            
            $
            40,337,288




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




3








**GUILIN
                PAPER, INC.**
              **(Formerly
                Logsearch, Inc.)****CONSOLIDATED
                STATEMENTS OF INCOME****FOR
                THE SIX MONTHS ENDING APRIL 30, 2007 AND APRIL 30, 2006**




04/30/2007
            
            04/30/2006Sales,
                net
            
            $
            16,084,334
            
            $
            14,695,951Cost
                of sales
            
            
            11,945,832
            
            
            10,501,748**Gross
                profit**
            
            
            4,138,502
            
            
            4,194,203General
                and administrative expenses
            
            
            1,425,689
            
            
            1,173,444**Income
                from operations**
            
            
            2,712,813
            
            
            3,020,759**Other
                (Income) Expense**Investment
                income
            
            
            -
            
            
            -Interest
                expense
            
            
            469,139
            
            
            474,467Other
                income net
            
            
            (728,529
            )
            
            (106,367
            )Total
                Other (Income) Expense
            
            
            2,972,203
            
            
            2,652,659**Income
                before income taxes**Provision
                for income taxes
            
            
            380,753
            
            
            338,370**Net
                income**
            
            $
            2,591,450
            
            $
            2,314,289




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




4





**GUILIN
                PAPER, INC.**
              **(Formerly
                Logsearch, Inc.)****CONSOLIDATED
                STATEMENTS OF INCOME****FOR
                THE THREE MONTHS ENDING APRIL 30, 2007 AND APRIL 30, 2006**




04/30/2007
            
            04/30/2006Sales,
                net
            
            $
            7,927,807
            
            $
            7,151,957Cost
                of sales
            
            
            5,799,466
            
            
            5,423,623**Gross
                profit**
            
            
            2,128,341
            
            
            1,728,334General
                and administrative expenses
            
            
            618,564
            
            
            472,225**Income
                from operations**
            
            
            1,509,777
            
            
            1,256,109Other
                (Income) Expense
            
            
            -
            
            
            -Investment
                income
            
            
            -
            
            
            -Interest
                expense
            
            
            228,527
            
            
            286,772Other
                income net
            
            
            74,144
            
            
            (39,895
            )Total
                Other (Income) Expense
            
            
            1,207,106
            
            
            1,009,232**Income
                before income taxes**Provision
                for income taxes
            
            
            150,572
            
            
            153,870**Net
                income**
            
            $
            1,056,534
            
            $
            855,362




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




5




**GUILIN
                PAPER, INC.**
              **(Formerly
                Logsearch, Inc.)****CONSOLIDATED
                STATEMENTS OF CASH FLOWS****FOR
                THE SIX MONTHS ENDED APRIL 30, 2007 AND 2006**




04/30/2007
                
                04/30/2006**CASH
                    FLOWS FROM OPERATING ACTIVITIES**Net
                    income
                
                $
                2,591,450
                
                $
                2,314,289Adjustments
                    to reconcile net income to net cashprovided
                    by operating activities:Depreciation
                    and amortization
                
                
                607,269
                
                
                505,647Provision
                    for doubtful accounts
                
                
                (480,261
                )
                
                37,783(Increase)
                    / decrease in assets:Accounts
                    receivables
                
                
                900,195
                
                
                289,588Other
                    receivables
                
                
                116,413
                
                
                (594,038
                )Trade
                    deposits
                
                
                (656,288
                )
                
                (118,645
                )Inventory
                
                
                79,205
                
                
                (28,467
                )Other
                    current assets
                
                
                (12,884
                )
                
                (28,771
                )Increase
                    / (decrease) in current liabilities:Accounts
                    payable and accrued expenses
                
                
                (3,924,012
                )
                
                (2,039,618
                )Customer
                    advances
                
                
                1,841,339
                
                
                (28,436
                )Income
                    tax payable
                
                
                (1,239,628
                )
                
                (27,693
                )**Net
                    cash provided by operating activities**
                
                
                (177,202
                )
                
                281,639**CASH
                    FLOWS FROM INVESTING ACTIVITIES**Purchase
                    of property & equipment
                
                
                (414,182
                )
                
                (858,212
                )**Net
                    cash provided by Investing activities**
                
                
                (414,182
                )
                
                (858,212
                )**CASH
                    FLOWS FROM FINANCING ACTIVITIES**Notes
                    payable accrued interest
                
                
                668,968
                
                
                353,536Additional
                    paid in capital
                
                
                -
                
                
                439,099**Net
                    cash (used in) provided by financing activities**
                
                
                668,968
                
                
                792,675Effect
                    of exchange rate changes on cash and cash equivalents
                
                
                (81,486
                )
                
                (485,900
                )Net
                    change in cash and cash equivalents
                
                
                (3,902
                )
                
                (269,798
                )**Cash
                    and cash equivalents, beginning balance**
                
                
                185,192
                
                
                557,633**Cash
                    and cash equivalents, ending balance**
                
                $
                181,290
                
                $
                287,835**SUPPLEMENTAL
                    DISCLOSURES:**Cash
                    paid during the year for:Income
                    tax payments
                
                $
                1,620,381
                
                $
                353,785Interest
                    payments
                
                $
                49,854
                
                $
                52,472





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




6





**GUILIN
                PAPER, INC.**
              **(Formerly
                Logsearch, Inc.)****CONSOLIDATED
                STATEMENT OF STOCKHOLDERS' EQUITY****FOR
                THE PERIODS ENDED APRIL 30, 2007 AND OCTOBER 31,
                2006**





Common
                Stock
            
            Additional
              Paid
                I Capital
            
            Statutory
              Reserves
            
            Comprehensive
              Loss
            
            Retained
              Earnings
            
            Total
              Shareholders
              EquityBalance
                11/1/2006
            
            $
            21,000
            
            $
            51,241
            
            $
            -
            
            $
            -
            
            $
            (63,961
            )
            $
            8,280Effect
                of Merger 12/31/2006
            
            
            27,078
            
            
            7,710,957
            
            
            5,246,450
            
            
            (534,436
            )
            
            -
            
            
            1,139,127Net
                Income
              4
                Months Ended 4/30/2007
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,538,528
            
            
            1,538,528Balance
                04/31/2007
            
            $
            47,078
            
            $
            7,762,198
            
            $
            5,246,450
            
            $
            (534,436
            )
            $
            1,474,567
            
            $
            13,915,371




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




7


**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTE
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      1 -** **ORGANIZATION**





As
      of
      April 18, 2007 an agreement and plan of merger had been made with Logsearch,
      Inc, a Nevada corporation (“LGSE”), LGSE Merger Sub, Inc., a Nevada Corporation
      and a wholly-owned Subsidiary of LGSE (“Sub”), China Lipu Paper Limited, a
      British Virgin Islands corporation (“CLP”), and the shareholders of
      CLP.





Where
      as
      the respected Board of Directors of LGSE, Sub and CLP have approved the merger
      of Sub with and into CLP (the “Merger”), whereby all of the issued and
      outstanding shares of the Common Stock of CLP (the “CLP Common Stock”) will be
      converted into the right to receive a specified number of shares of the Common
      Stock of LGSE (the “LGSE Common Stock”); and the parties each desire to make
      certain representations, warranties and agreements in connection with the
      Merger.





China
      Lipu Paper Ltd was incorporated in 1965 under the laws of the People’s Republic
      of China (PRC). It was named CPL and restructured from a state owned company
      in
      1998. The companies subsidiaries include Guangi Lipu Paper Manufacture Ltd.,
      Lipu Lubao Paper Recycling Ltd, and Hengli Power Generation Ltd., which are
      all
      wholly owned. The Company is engaged in the business of manufacturing of
      cardboard and cartons, waste paper recycling, and power generation.





For
      accounting purposes, the Company accounted for the transaction as a reverse
      acquisition and with Logsearch Inc. being the surviving entity. The Company
      did
      not recognize goodwill or any intangible assets in connection with the
      transaction. Prior to the Agreement, the company was an inactive corporation
      with no significant assets and liabilities.





The
      accompanying financial statements present the historical financial condition,
      results of operations and cash flows of the operating company prior to the
      merger.





**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**





Basis
      of Presentation





The
      accompanying financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States of America. The
      Company's functional currency is the Chinese Renminbi; however the accompanying
      consolidated financial statements have been translated and presented in United
      States Dollars.




8




**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**





Translation
      Adjustment





As
      of
      April 30, 2007 and October 31, 2006, the accounts of Guilin Paper Inc were
      maintained, and its financial statements were expressed, in Chinese Yuan
      Renminbi (CNY). Such financial statements were translated into U.S. Dollars
      (USD) in accordance with Statement of Financial Accounts Standards (SFAS) No.
      52, Foreign Currency Translation with the CNY as the functional currency.
      According to the Statement, all assets and liabilities were translated at the
      current exchange rate, stockholders equity are translated at the historical
      rates and income statement items are translated at the average exchange rate
      for
      the period. The resulting translation adjustments are reported under other
      comprehensive income in accordance with SFAS No. 130, Reporting Comprehensive
      Income as a component of shareholders equity. Transaction gains and losses
      are
      reflected in the income statement.





Use
      of
      Estimates





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





Risks
      and Uncertainties





The
      Company is subject to substantial risks from, among other things, intense
      competition associated with the industry in general, other risks associated
      with
      financing, liquidity requirements, rapidly changing customer requirements,
      limited operating history, foreign currency exchange rates and the volatility
      of
      public markets.





Contingencies





Certain
      conditions may exist as of the date the financial statements are issued, which
      may result in a loss to the Company but which will only be resolved when one
      or
      more future events occur or fail to occur. The Company’s management and legal
      counsel assess such contingent liabilities, and such assessment inherently
      involves an exercise of judgment. In assessing loss contingencies related to
      legal proceedings that are pending against the Company or unasserted claims
      that
      may result in such proceedings, the Company’s legal counsel evaluates the
      perceived merits of any legal proceedings or unasserted claims as well as the
      perceived merits of the amount of relief sought or expected to be
      sought.





If
      the
      assessment of a contingency indicates that it is probable that a material loss
      has been incurred and the amount of the liability can be estimated, then the
      estimated liability would be accrued in the Company’s financial statements. If
      the assessment indicates that a potential material loss contingency is not
      probable but is reasonably possible, or is probable but cannot be estimated,
      then the nature of the contingent liability, together with an estimate of the
      range of possible loss if determinable and material would be disclosed.





Loss
      contingencies considered to be remote by management are generally not disclosed
      unless they involve guarantees, in which case the guarantee would be
      disclosed.




9


**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED** **)**





Cash
      and Cash Equivalents





Cash
      and
      cash equivalents include cash in hand and cash in time deposits, certificates
      of
      deposit and all highly liquid debt instruments with original maturities of
      three
      months or less.





Accounts
      Receivable





The
      Company maintains reserves for potential credit losses on accounts receivable.
      Management reviews the composition of accounts receivable and analyzes
      historical bad debts, customer concentrations, customer credit worthiness,
      current economic trends and changes in customer payment patterns to evaluate
      the
      adequacy of these reserves. Terms of the sales vary. Reserves are recorded
      primarily on a specific identification basis. Allowance for doubtful debts
      amounted to $1,505,730 and $1,985,988 as at April 30, 2007 and October 31,
      2006
      respectively.




Inventories





Inventories
      are valued at the lower of cost (determined on a weighted average basis) or
      market. The Management compares the cost of inventories with the market value
      and allowance is made for writing down their inventories to market value, if
      lower. As of April 30, 2007 inventory consisted of finished goods valued at
      $1,172,010 and raw material inventory was $2,307,501.




Property,
      Plant & Equipment




Property
      and equipment are stated at cost. Expenditures for maintenance and repairs
      are
      charged to earnings as incurred; additions, renewals and betterments are
      capitalized. When property and equipment are retired or otherwise disposed
      of,
      the related cost and accumulated depreciation are removed from the respective
      accounts, and any gain or loss is included in operations. Depreciation of
      property and equipment is provided using the straight-line method for
      substantially all assets with estimated lives of:





Real
                Property
            
            
            50
                yearsMachinery
                & Equipment
            
            
            15
                yearsDelivery
                Equipment
            
            
            10
                yearsComputers
                & office Equipment
            
            
            5
                years




10




**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**




**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED** **)**





As
      of
      April 30, 2007 Property, Plant & Equipment consist of the
      following:





4/30/2007Real
                Property
            
            $
            5,105,065Machinery
                & Equipment
            
            
            15,641,872Delivery
                Equipment
            
            
            793,765Computers
                and Office equipment
            
            $
            141,59121,682,293Accumulated
                depreciation
            
            
            7,681,549$
            14,000,744




Intangible
      Assets





Intangible
      assets are amortized using the straight-line method over their estimated period
      of benefit, ranging from one to ten years. We evaluate the recoverability of
      intangible assets periodically and take into account events or circumstances
      that warrant revised estimates of useful lives or that indicate that impairment
      exists. All of our intangible assets are subject to amortization. No impairments
      of intangible assets have been identified during any of the periods presented.
      In August of 2000 the company purchased land rights which expire in
      2050.





The
      components of finite-lived intangible assets are as follows:


April
                  30, 2007
              
              October
                  31, 2006$
                  2,940,343
              
              $
              2,940,343





The
      estimated future amortization expense related to intangible asset as of April
      30, 2007 is as follows:


2007
              
              $
              62,8162008
              
              
              62,8162009
              
              
              62,8162010
              
              
              62,8162011
              
              
              62,816Thereafter
              
              $
              2,244,673





11





**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED** **)**





Long-Lived
      Assets




Effective
      January 1, 2002, the Company adopted Statement of Financial Accounting Standards
      No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS
      144), which addresses financial accounting and reporting for the impairment
      or
      disposal of long-lived assets and supersedes SFAS No. 121, Accounting for the
      Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,
      and
      the accounting and reporting provisions of APB Opinion No. 30, Reporting the
      Results of Operations for a Disposal of a Segment of a Business. The Company
      periodically evaluates the carrying value of long-lived assets to be held and
      used in accordance with SFAS 144. SFAS 144 requires impairment losses to be
      recorded on long-lived assets used in operations when indicators of impairment
      are present and the undiscounted cash flows estimated to be generated by those
      assets are less than the assets carrying amounts. In that event, a loss is
      recognized based on the amount by which the carrying amount exceeds the fair
      market value of the long-lived assets. Loss on long-lived assets to be disposed
      of is determined in a similar manner, except that fair market values are reduced
      for the cost of disposal. Based on its review, the Company believes that, as
      of
      April 30, 2007 there were no significant impairments of its long-lived assets.




Fair
      Value of Financial Instruments




Statement
      of financial accounting standard No. 107, Disclosures about fair value of
      financial instruments, requires that the Company disclose estimated fair values
      of financial instruments. The carrying amounts reported in the statements of
      financial position for current assets and current liabilities qualifying as
      financial instruments are a reasonable estimate of fair value.




Revenue
      Recognition





The
      Company’s revenue recognition policies are in compliance with Staff accounting
      bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to
      customers when a formal arrangement exists, the price is fixed or determinable,
      the delivery is completed, no other significant obligations of the Company
      exist
      and collectability is reasonably assured. Payments received before all of the
      relevant criteria for revenue recognition are satisfied are recorded as unearned
      revenue.




Stock-Based
      Compensation




In
      October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based
      Compensation. SFAS No. 123 prescribes accounting and reporting standards for
      all
      stock-based compensation plans, including employee stock options, restricted
      stock, employee stock purchase plans and stock appreciation rights. SFAS No.
      123
      requires compensation expense to be recorded (i) using the new fair value method
      or (ii) using the existing accounting rules prescribed by Accounting Principles
      Board Opinion No. 25, Accounting for stock issued to employees (APB 25) and
      related interpretations with proforma disclosure of what net income and earnings
      per share would have been had the Company adopted the new fair value method.
      The
      Company uses the intrinsic value method prescribed by APB 25 and has opted
      for
      the disclosure provisions of SFAS No.123.




12




**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED** **)**





Advertising





Advertising
      expenses consist primarily of costs of promotion for corporate image and product
      marketing and costs of direct advertising. The Company expenses all advertising
      costs as incurred.




Income
      Taxes




The
      Company utilizes SFAS No. 109, Accounting for Income Taxes, which requires
      the
      recognition of deferred tax assets and liabilities for the expected future
      tax
      consequences of events that have been included in the financial statements
      or
      tax returns. Under this method, deferred income taxes are recognized for the
      tax
      consequences in future years of differences between the tax bases of assets
      and
      liabilities and their financial reporting amounts at each period end based
      on
      enacted tax laws and statutory tax rates applicable to the periods in which
      the
      differences are expected to affect taxable income. Valuation allowances are
      established, when necessary, to reduce deferred tax assets to the amount
      expected to be realized.




Basic
      and Diluted Earnings Per Share




Earnings
      per share is calculated in accordance with the Statement of financial accounting
      standards No. 128 (SFAS No. 128), Earnings per share. SFAS No. 128 superseded
      Accounting Principles Board Opinion No.15 (APB 15). Net loss per share for
      all
      periods presented has been restated to reflect the adoption of SFAS No. 128.
      Basic net loss per share is based upon the weighted average number of common
      shares outstanding. Diluted net loss per share is based on the assumption that
      all dilutive convertible shares and stock options were converted or exercised.
      Dilution is computed by applying the treasury stock method. Under this method,
      options and warrants are assumed to be exercised at the beginning of the period
      (or at the time of issuance, if later), and as if funds obtained thereby were
      used to purchase common stock at the average market price during the period.




Statement
      of Cash Flows




In
      accordance with SFAS No. 95, Statement of Cash Flows, cash flows from the
      Company’s operations is based upon the local currencies. As a result, amounts
      related to assets and liabilities reported on the statement of cash flows will
      not necessarily agree with changes in the corresponding balances on the balance
      sheet.





Concentration
      of Credit Risk




Financial
      instruments that potentially subject the Company to concentrations of credit
      risk are cash, accounts receivable and other receivables arising from its normal
      business activities. The Company places its cash in what it believes to be
      credit-worthy financial institutions. The Company has a diversified customer
      base, most of which are in China. The Company controls credit risk related
      to
      accounts receivable through credit approvals, credit limits and monitoring
      procedures. The Company routinely assesses the financial strength of its
      customers and, based upon factors surrounding the credit risk, establishes
      an
      allowance, if required, for uncollectible accounts and, as a consequence,
      believes that its accounts receivable credit risk exposure beyond such allowance
      is limited.




13




**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED** **)**





Segment
      Reporting





Statement
      of Financial Accounting Standards No. 131 (SFAS 131), Disclosure about Segments
      of an Enterprise and Related Information ̈ requires use of the management
      approach ̈ model for segment reporting. The management approach model is based on
      the way a company's management organizes segments within the company for making
      operating decisions and assessing performance. Reportable segments are based
      on
      products and services, geography, legal structure, management structure, or
      any
      other manner in which management disaggregates a company.




Recent
      accounting pronouncements





In
      December 2004, the FASB issued FASB Statement No. 123R, “Share-Based Payment, an
      Amendment of FASB Statement No. 123” (“FAS No. 123R”). FAS No. 123R requires
      companies to recognize in the statement of operations the grant-date fair value
      of stock options and other equity-based compensation issued to employees. FAS
      No. 123R is effective beginning in the Company's first quarter of fiscal 2006.





In
      May
      2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections.”
This statement applies to all voluntary changes in accounting principle and
      requires retrospective application to prior periods' financial statements of
      changes in accounting principle, unless this would be impracticable. This
      statement also makes a distinction between “retrospective application” of an
      accounting principle and the “restatement” of financial statements to reflect
      the correction of an error. This statement is effective for accounting changes
      and corrections of errors made in fiscal years beginning after December 15,
      2005.





In
      June
      2005, the EITF reached consensus on Issue No. 05-6, Determining the Amortization
      Period for Leasehold Improvements (“EITF 05-6.”) EITF 05-6 provides guidance on
      determining the amortization period for leasehold improvements acquired in
      a
      business combination or acquired subsequent to lease inception. The guidance
      in
      EITF 05-6 will be applied prospectively and is effective for periods beginning
      after June 29, 2005. EITF 05-6 is not expected to have a material effect on
      its
      consolidated financial position or results of operations.





In
      June
      2005, the FASB Staff issued FASB Staff Position 150-5 (FSP 150-5), Issuers
      Accounting under FASB Statement No. 150 for Freestanding Warrants and Other
      Similar Instruments on Shares that are Redeemable. FSP 150-5 addresses
      whether freestanding warrants and other similar instruments on shares that
      are
      redeemable, either puttable or mandatorily redeemable, would be subject to
      the
      requirements of FASB Statement No. 150, Accounting for Certain Financial
      Instruments with Characteristics of Both Liabilities and Equity, regardless
      of
      the timing or the redemption feature or the redemption price. The FSP is
      effective after June 30, 2005.




14




**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED** **)**





In
      February 2006, FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial
      Instruments SFAS No. 155 amends SFAS No 133, Accounting for Derivative
      Instruments and Hedging Activities ̈, and SFAF No. 140, Accounting for Transfers
      and Servicing of Financial Assets and Extinguishments of Liabilities¡ ̈. SFAS No.
      155, permits fair value remeasurement for any hybrid financial instrument that
      contains an embedded derivative that otherwise would require bifurcation,
      clarifies which interest-only strips and principal-only strips are not subject
      to the requirements of SFAS No. 133, establishes a requirement to evaluate
      interest in securitized financial assets to identify interests that are
      freestanding derivatives or that are hybrid financial instruments that contain
      an embedded derivative requiring bifurcation, clarifies that concentrations
      of
      credit risk in the form of subordination are not embedded derivatives, and
      amends SFAS No. 140 to eliminate the prohibition on the qualifying
      special-purpose entity from holding a derivative financial instrument that
      pertains to a beneficial interest other than another derivative financial
      instrument. This statement is effective for all financial instruments acquired
      or issued after the beginning of the Company’s first fiscal year that begins
      after September 15, 2006.





In
      March
      2006, the FASB issued FASB Statement No. 156, Accounting for Servicing of
      Financial Assets - an amendment to FASB Statement No. 140. Statement 156
      requires that an entity recognize a servicing asset or servicing liability
      each
      time it undertakes an obligation to service a financial asset by entering into
      a
      service contract under certain situations. The new standard is effective for
      fiscal years beginning after September 15, 2006. The Company does not
      expect its adoption of this new standard to have a material impact on its
      financial position, results of operations or cash flows.





In
      September, 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles (GAAP), and expands disclosures about
      fair value measurements. This Statements applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. However, for some entities, the application of
      this
      Statement will change current practice. This Statement is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years. The management is currently
      evaluating the effect of this pronouncement on financial
      statements.





In
      September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
      Pension and Other Postretirement Plans - an amendment of FASB Statements No.
      87,
      88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
      employer to recognize the over funded or under funded status of a defined
      benefit postretirement plan (other than a multiemployer plan) as an asset or
      liability in its statement of financial position and to recognize changes in
      that funded statues in the year in which the changes occur through comprehensive
      income of a business entity or changes in unrestricted net assets of a
      not-for-profit organization. This Statement also improves financial reporting
      by
      requiring an employer to measure the funded status of a plan as of the date
      of
      its year-end statement of financial position, with limited exceptions. An
      employer with publicly traded equity securities is required to initially
      recognize the funded status of a defined benefit postretirement plan and to
      provide the required disclosures as of the end of the fiscal year ending after
      December 15, 2006. An employer without publicly traded equity securities is
      required to recognize the funded status
      of
      a defined benefit postretirement plan and to provide the required disclosures
      as
      of the end of the fiscal year ending after June 15, 2007. However, an employer
      without publicly traded equity securities is required to disclose the following
      information in the notes to financial statements for a fiscal year ending after
      December 15, 2006, but before June 16, 2007, unless it has applied the
      recognition provisions of this Statement in preparing those financial
      statements.




15


**GUILIN
        PAPER, INC.**
 **(Formerly
        Logsearch, Inc.)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **APRIL
        30, 2007**
 
 **Note
        2 -** **SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED** **)**
  A
        brief
        description of the provisions of this Statement


The
      date
      that adoption is required


The
      date
      the employer plans to adopt the recognition provisions of this Statement, if
      earlier.





The
      requirement to measure plan assets and benefit obligations as of the date of
      the
      employer’s fiscal year-end statement of financial position is effective for
      fiscal years ending after December 15, 2008. The management is currently
      evaluating the effect of this pronouncement on financial
      statements.





The
      Company believes that the adoption of these standards will have no material
      impact on its financial statements.





In
      December 2006, the FASB issued FSP EITF 00-19-2, Accounting for Registration
      Payment Arrangements (“FSP 00-19-2”) which addresses accounting for registration
      payment arrangements. FSP 00-19-2 specifies that the contingent obligation
      to
      make future payment or otherwise transfer consideration under a registration
      payment arrangement, whether issued as a separate agreement or included as
      a
      provision of a financial instrument or other agreement or included as a
      provision of a financial or other agreement, should be separately recognized
      and
      measured in accordance with FASB Statement No. 5, Accounting for Contingencies.
      FSP 00-19-2 further clarifies that a financial instrument subject to a
      registration payment arrangement should be accounted for in accordance with
      other applicable generally accepted accounting principles without regard to
      the
      contingent obligation to transfer consideration pursuant to the registration
      payment arrangement.





For
      registration payment arrangements and financial instruments subject to those
      arrangements that were entered into prior to the issuance of EITF 00-19-2,
      this
      guidance shall be effective for financial statements issued for fiscal years
      beginning after December 15, 2006 and interim periods within those fiscal years.
      The Company has not yet determined the impact that the adoption of FSP 00-19-2
      will have on its financial statements.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities.” SFAS 159 permits entities to choose
      to measure many financial instruments, and certain other items, at fair value.
      SFAS 159 applies to reporting periods beginning after November 15, 2007. The
      adoption of SFAS 159 is not expected to have a material impact on the Company’s
      financial condition or results of operations.




16





**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      3 -** **NOTES
      PAYABLE**





The
      following summarizes notes payable as of April 30, 2007 and October 31,
      2006.





4/30/2007
            
            10/31/2006Cinda
                Trustor Of China - Nanning
            
            $
            8,289,074
            
            $
            8,142,863Note
                originally held by Bank of China - Guilin. On June 25, 2004 the loans
                were
                transferred to Cinda Trustor of China. Original terms of these loans
                call
                for interest between 5.223% & 5.475% interest per annum, with
                principal due between 1996-2002.Changcheng
                Trustor Of China- Nanning
            
            $
            1,215,195
            
            $
            1,190,877Note
                originally held by Industry and Commercial Bank of China. On June
                30, 2005
                the loans were transferred to China Great Wall Asset Management Corp.
                Original term of this loan called for interest of 6.15% interest
                per
                annum. Principal past due at date of transfer.Agricultural
                Bank Of China
            
            $
            4,055,309
            
            $
            3,974,155Term
                of notes call for interest from 6.912 to 7.488% per annum with principal
                due in 2007 & 2008.Total
            
            $
            13,559,578
            
            $
            13,307,895Current
                Portion
            
            $
            12,905,496
            
            $
            12,654,944Long
                term Portion
            
            $
            654,082
            
            $
            652,951





Notes
      to
      Cinda Trustor of China are collateralized with pledged machinery and equipment.
      Notes to Agricultural Bank of China are collateralized with both pledged
      machinery and equipment and plant buildings.





As
      of
      April 30, 2007 and October 31, 2006 accrued interest unpaid on these notes
      was
      $6,222,630 and $5,803,345 respectively.





**Note
      4 -** **COMPENSATED
      ABSENCES**




Regulation
      45 of local labor law entitles employees to annual vacation leave after one
      year
      of service. In general all leave must be utilized annually, with proper
      notification. Any unutilized leave is cancelled.




17




**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      5 -** **INCOME
      TAXES**





The
      Company is governed by the Income Tax Laws of the PRC. Pursuant to the PRC
      Income Tax Laws, the Enterprise Income Tax (EIT) is at a statutory rate of
      33%,
      which is comprises of 30% national income tax and 3% local income
      tax.


The
                  following is a reconciliation of income tax expense:04/30/2007Current
              
              $
              380,753Deferred
              
              
              -Total
              
              $
              380,75312/31/2006Current
              
              $
              338,370Deferred
              
              
              -Total
              
              $
              380,370
 PRC
                  income tax
              
              
              33
              %Effective
                  rate
              
              
              33
              %





**Note
      6 -** **STATUTORY
      RESERVES**





In
      accordance with the laws and regulations of the PRC, a wholly-owned Foreign
      Invested Enterprises income, after the payment of the PRC income taxes, shall
      be
      allocated to the statutory surplus reserves and statutory public affair fund.
      Prior to January 1, 2006 the proportion of allocation for reserve was 10 percent
      of the profit after tax to the surplus reserve fund and additional 5-10 percent
      to the public affair fund. The public affair fund reserve was limited to 50
      percent of the registered capital. Effect January 1, 2006 there is now only
      one
      fund requirement. The reserve is 10 percent of income after tax, not to exceed
      50 percent of registered capital.





Statutory
      Reserve funds are restricted for set off against losses, expansion of production
      and operation or increase in register capital of the respective company.
      Statutory public welfare fund is restricted to the capital expenditures for
      the
      collective welfare of employees. These reserves are not transferable to the
      Company in the form of cash dividends, loans or advances. These reserves are
      therefore not available for distribution except in liquidation. As of April
      30,
      2007 and October 31, 2006 the Company had allocated $5,246,450 and $4,193,528
      to
      these non-distributable reserve funds, respectively.




18




**GUILIN
      PAPER, INC.**


**(Formerly
      Logsearch, Inc.)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2007**





**Note
      7 -** **OTHER
      COMPREHENSIVE INCOME**





Balances
      of related after-tax components comprising accumulated other comprehensive
      income (loss), included in stockholders equity at April 30, 2007 and October
      31,
      2006 are as follows:





Foreign
                Currency Translation Adjustment
            
            Accumulated
                Other Comprehensive IncomeBalance
                at November 1, 2005
            
            $
            59,071
            
            $
            59,071Change
                for Year
            
            
            (593,507
            )
            
            (593,507
            )Balance
                at October 31, 2006
            
            $
            (534,367
            )
            $
            (534,367
            )Change
                for Six Months
            
            
            (81,486
            )
            
            (81,486
            )Balance
                at April 30, 2007
            
            $
            (615,922
            )
            $
            (615,922
            )





**Note
      8**  **-** **CURRENT
      VULNERABILITY DUE TO CERTAIN RISK FACTORS**





The
      Company’s operations are carried out in the PRC. Accordingly, the Company’s
      business, financial condition and results of operations may be influenced by
      the
      political, economic and legal environments in the PRC, by the general state
      of
      the PRC’s economy. The Company’s business may be influenced by changes in
      governmental policies with respect to laws and regulations, anti-inflationary
      measures, currency conversion and remittance abroad, and rates and methods
      of
      taxation, among other things.





**Note
      9 -** **MAJOR
      CUSTOMERS AND CREDIT RISK**





The
      Company had no customers who accounted for more then 10% of revenues during
      the
      six months year ended April 30, 2007 and 2006. One customer accounted for 20%
      of
      the Company’s accounts receivable at April 30, 2007. The Company had no vendors
      during the six months years ended April 30, 2007 and 2006 who accounted for
      more
      than 10% of the total purchases. Also no vendor at April 30, 2007 comprised
      more
      then the Company’s accounts payable.




19




**Item
      2.****Management’s
      Discussion and Analysis Or Plan of Operations**




The
      following discussion and analysis should be read in conjunction with the
      consolidated financial statements and related notes included elsewhere in this
      quarterly report.





**Forward
      Looking Statements**





The
      information in this discussion contains forward-looking statements within the
      meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
      These
      forward-looking statements involve risks and uncertainties, including statements
      regarding our capital needs, business strategy and expectations. Any statements
      contained herein that are not statements of historical facts may be deemed
      to be
      forward-looking statements. In some cases, you can identify forward-looking
      statements by terminology such as “may”, “will”, “should”, “expect”, “plan”,
“intend”, “anticipate”, “believe”, estimate”, “predict”, “potential” or
“continue”, the negative of such terms or other comparable terminology. Actual
      events or results may differ materially. We disclaim any obligation to publicly
      update these statements, or disclose any difference between its actual results
      and those reflected in these statements.





**Business
      Overview**





**Results
      of Operations**




**Net
      Sales**




Net
      Sales
      for the quarter ended April 30, 2007, totaled $7,927,807, compared to $7,151,957
      for the quarter ended April 30, 2006, an increase of $775,850 or approximately
      10.85%. The increase was due to the market expansion by the company.




Net
      sales
      for the six months ended April 30, 2007 totaled $ 16,084,334
      compared to $ 14,695,951
      for the six months ended April 30, 2006, an
      increase of $ 1,388,383
      or approximately 9.5%.
      The increase
      was due to the market expansion by the company.




C **ost
      of Sales**




Cost
      of
      sales for the quarter ended April 30, 2007 totaled $5,799,466, 73.15% of the
      net
      sales in the same period, compared to $5,423,623 for the quarter ended April
      30,
      2006, or 75.83% of the net sales in the same period, a $375,843 increase, or
      approximately 6.93%. The increase in gross margin was due to the decrease in
      raw
      material cost.




Cost
      of
      sales for the six months ended April 30, 2007 totaled $ 11,945,832
      compared to $ 10,501,748
      for the six months ended April 30, 2006, an increase
      of $ 1,444,084
      or approximately 13.75%. The increase was due to the increase in net sales.
      The
      cost to sales ratio for the six months ended April 30, 2007, is 74.27% compared
      to 71.46% in the six months ended April 30, 2006, an increase of 3.78%. The
      decrease in gross margin was due to the increase in raw material cost and the
      appreciation of RMB currency.




20




**General
      and Administrative Expenses**




Selling,
      general and administrative, and consulting fees for the quarter ended April
      30,
      2007 totaled $618,564, 7.80% of net sales in the same period, compared to
      $472,225, 6.60% of net sales for the quarter ended April 30, 2006, an increase
      of $146,339, or approximately 30.99%. The increase was due to the increase
      in
      marketing expenses and employee’s salaries expenses.




Selling,
      general and administrative, and consulting fees for the six months ended April
      30, 2007 totaled $1,425,689, 8.86% of net sales in the same period, compared
      to
      $1,173,444, 7.98% of net sales for the six months ended April 30, 2006, an
      increase of $252,245, or approximately 21.5%. The increase in general and
      administrative expenses was primarily due to the increase expenses in market
      expansion, employee’s salaries expenses, accounting and legal, and other
      professional consultant fees.




**Income
      (Loss) from Operations**




Income
      (loss) from operations for the quarter ended April 30, 2007 totaled $1,509,777,
      compared to $1,256,109 for the quarter ended April 30, 2006, an increase of
      $253,668 or approximately 20.2%. The increase was due to the increase in sales.





Income
      (loss) from operations for the six months ended April 30, 2007 totaled
      $ 2,712,813  compared
      to $3,020,759  for
      the
      six months ended April 30, 200 6,
      a
      decrease of
      $ 307,946  or
      approximately 10.19%.
      The decrease was due to increase in raw material cost in year 2006.





**Other
      Income (Expenses)**




Other
      income (Expenses) for the quarter ended April 30, 2007 totaled ($302,671),
      compared to ($246,877) for the quarter ended April 30, 2006, an expense increase
      of $55,794 or approximately 22.60%. The increase in other expenses was due
      to
      the increase expenses on non-operating activities.




Other
      income (Expenses) for the six months ended April 30, 2007 totaled $259,390
      compared to ($368,100) for the six month ended April 30, 2006, an increase
      of
      $627,490, or approximately 170.46%. The increase in the other income was due
      to
      the decrease in interest expenses.




**Net
      Income**




Net
      income (loss) for the quarter ended April 30, 2007, totaled $1,056,534, compare
      to $855,362 for the quarter ended April 30, 2006, an increase of $201,172,
      or
      23.5%. The increase in net income was due the increase in net sales and
      appreciation of RMB currency.





Net
      income (loss) for the six months ended April 30, 2007 totaled $ 2,591,450
      compared to $ 2,314,289
      for the six months ended April 30, 2006, an
      increase of $ 277,161
      or approximately 11.98%.
      The increase in net income was primarily due to the increase in net sales and
      the appreciation in RMB currency.




21




**Liquidity
      and Capital Resources**




As
      of
      April 30, 2007, we had cash and cash equivalents of $181,290 as compared to
      $287,835 as of April 30, 2006. Cash flows from operating activities was
      ($177,202) for the six month period ended April 30, 2007 as compared to $281,639
      for the period ended April 30, 2006. Cash flows from financing activities was
      $668,968 for the six month period ended April 30, 2007 as compared to $792,675
      for the period ended April 30, 2006. We expect that our cash and cash
      equivalents will be sufficient to satisfy our cash requirements for the next
      twelve months. On a long-term basis, our liquidity is dependent on successfully
      executing our business plan, receipt of revenues, and additional infusions
      of
      capital through equity and debt financing. Any funds raised from an offering
      of
      our equity or debt will be used to continue to develop and execute our business
      plan. However, there can be no assurance that we will be able to obtain
      additional equity or debt financing on terms acceptable to us.





We
      do not
      currently own any plant or significant equipment, and during 2007, we do not
      anticipate purchasing any plant or significant equipment.





**Item
      3.**  **Controls
      and Procedures**




**Evaluation
      of Disclosure Controls and Procedures**




As
      of
      April 30, 2007, the end of the period covered by this report, our Chief
      Executive Officer and our Chief Financial Officer reviewed and evaluated the
      effectiveness of the our disclosure controls and procedures (as defined in
      Exchange Act Rule 13a-15(e) and 15d-15(e)), which are designed to ensure that
      material information we must disclose in our report filed or submitted under
      the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded,
      processed, summarized, and reported on a timely basis, and have concluded,
      based
      on that evaluation, that as of such date, our disclosure controls and procedures
      were effective to ensure that information required to be disclosed by us in
      reports that we file or submit under the Exchange Act is accumulated and
      communicated to our Chief Executive Officer and Chief Financial Officer as
      appropriate to allow timely decisions regarding required disclosure.




**Changes
      in Internal Control over Financial Reporting**




There
      was
      no change in our internal control over financial reporting that occurred during
      the fiscal quarter covered by this report on Form 10-QSB that has materially
      affected, or is reasonably likely to materially affect, our internal control
      over financial reporting.




22




**PART
      II - OTHER INFORMATION**




**Item
      1.****Legal
      Proceedings**




Not
      applicable




**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds**




Responsive
      information previously has been included in a Current Report on Form
      8-K.




**Item
      3. Defaults Upon Senior Securities**




Not
      applicable.




**Item
      4. Submission of Matters to a Vote of Security
      Holders**




Responsive
      information previously has been included in an Information Statement on Schedule
      14C.




**Item
      5. Other Information**




On
      June
      13, 2007 the Company filed a Certificate of Amendment to Articles of
      Incorporation with the State of Nevada changing the name of the Company to
      Guilin Paper, Inc.




On
      June
      13, 2007 the Company changed the Company’s fiscal year end to December
      31.




**Item
      6. Exhibits**




**Exhibit**
              **Number**
            
            **Exhibit
                Title**3.1
            
            Articles
                of Merger.3.2
            
            Certificate
                of Amendment to Articles of Incorporation31.1
            
            Certificate
                of CEO/CFO as Required by Rule 13a-14(a)/15d-1431.2
            
            Certificate
                of CEO/CFO as Required by Rule Rule 13a-14(b) and Rule 15d-14(b)
                (17 CFR
                240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the
                United
                States Code32.1
            
            Certificate
                of CEO as Required by Rule Rule 13a-14(b) and Rule 15d-14(b) (17
                CFR
                240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the
                United
                States Code




23




**SIGNATURES**




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




Guilin
                Paper, Inc.Date:
                June 18, 2007By:
            /s/
                Fangde ZhangFangde
                Zhang, Chief Executive Officer/s/
                Mingzhu ZhangMingzhu
                Zhang, Chief Financial Officer




24