UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

          [X] Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                For the quarterly period ended December 31, 2007

                                       or
            [ ] Transition Report Pursuant to Section 13 or 15 (d) of
                       the Securities Exchange Act of 1934


                               BIRCH BRANCH, INC.
                               ------------------
        (Exact name of small business issuer as specified in its charter)

         Colorado                                       84-1124170
------------------------                 ---------------------------------------
(State of incorporation)                 (I.R.S. Employer Identification Number)


                         2560 W. Main Street, Suite 200
                               Littleton, CO 80120
                               -------------------
                    (Address of principal executive offices)


                                 (303) 794-9450
                                 ----  --- ----
                           (Issuer's telephone number)


Indicate by check mark whether the small business issuer: (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the proceeding 12 months (or for such shorter period that the
small business issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                                 YES [X] NO [ ]

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

                                 YES [X] NO [ ]


As of February 14, 2008 the Company had 1,708,123 shares of its no par value
common stock issued and outstanding.




<PAGE>





Table of Contents


                                                                        Page No.
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

          Condensed Balance Sheets
          December 31, 2007 (unaudited) and December 31, 2006                 2

          Condensed Statements of Operations Three
          Months Ended December 31, 2007 and 2006 and
          Six Months Ended December 31, 2007 and 2006
          and from July 1, 2002 (date of commencement
          of development stage) through December 31, 2007 (unaudited)         3

          Condensed Statements of Cash Flows Three
          Months Ended December 31, 2007 and 2006 and
          Six Months Ended December 31, 2007 and 2006
          and from July 1, 2002 (date of commencement
          of development stage) through December 31, 2007 (unaudited)         4

          Notes to Condensed Financial Statements (unaudited)                 5

Item 2.  Management's Discussion and Analysis or Plan of Operation            9

Item 3.  Controls and Procedures                                             10

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                   11

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds         11

Item 3.  Defaults Upon Senior Securities                                     11

Item 4.  Submission of Matters to a Vote of Security Holders                 11

Item 5.  Other Information                                                   11

Item 6.  Exhibits                                                            11


<PAGE>



Part I FINANCIAL INFORMATION

Item 1 - CONDENSED INTERIM FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                               BIRCH BRANCH, INC.
                          (A Development Stage Company)
                            CONDENSED BALANCE SHEETS


                                                               December 31,   June 30,
                                                                   2007         2007
                                                                ---------    ---------
                                                               (unaudited) (see Note 1)
<S>                                                             <C>          <C>
ASSETS
Current assets:
        Cash                                                    $   6,446    $   6,802
                                                                ---------    ---------
           Total current assets                                     6,446        6,802

        Total assets                                            $   6,446    $   6,802
                                                                =========    =========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
        Accounts payable and accrued expenses                   $     675    $     298
        Accrued expense                                             2,045          547
        Note payables                                              55,000       35,000
                                                                ---------    ---------

          Total current liabilities                                57,720       35,845

SHAREHOLDERS' EQUITY (DEFICIT) (Note 2)
Preferred stock, authorized 50,000,000 shares, no par value,
    none issued or outstanding                                         --           --
Common stock, authorized 500,000,000 shares, no par value,
    1,708,123 issued and outstanding                               65,613       65,613
Additional paid in capital                                        152,877      152,877
Deferred loan fee, net of amortization                             (4,063)      (4,567)
Accumulated (deficit)                                              (5,173)      (5,173)
Accumulated (deficit) during development stage                   (260,528)    (237,793)
                                                                ---------    ---------

         Total shareholders' equity (deficit)                     (51,274)     (29,043)
                                                                ---------    ---------

         Total liabilities and shareholders' equity (deficit)   $   6,446    $   6,802
                                                                =========    =========
</TABLE>


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

                                       2

<PAGE>
<TABLE>
<CAPTION>
                               BIRCH BRANCH, INC.
                          (A Development Stage Company)
                 CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

                                                                                                               Period
                                                                                                            July 1, 2002
                                                                                                              (Date of
                                                                                                            Commencement
                                                                                                                 of
                                              For the Three   For the Three   For the Six    For the Six    Development
                                               Months Ended    Months Ended   Months Ended   Months Ended    Stage) to
                                               December 31,    December 31,   December 31,   December 31,   December 31,
                                                   2007            2006           2007           2006           2007
                                                -----------    -----------    -----------    -----------    -----------
<S>                                             <C>            <C>            <C>            <C>            <C>
Revenues                                        $        --    $        --    $        --    $        --    $        --

Operating expenses:
     Accounting fees                                  2,300             --          7,330          4,810         31,650
     Legal fees                                       1,632          2,094          1,632          2,094         35,270
     Shareholder expense                              1,553          2,088          1,733          3,809         17,468
     Other general and administrative expense         4,508            762         10,038          1,507         27,551
                                                -----------    -----------    -----------    -----------    -----------
       Total operating expenses                       9,993          4,944         20,733         12,220        111,939
                                                -----------    -----------    -----------    -----------    -----------

Net (loss) from operations                           (9,993)        (4,944)       (20,733)       (12,220)      (111,939)
                                                -----------    -----------    -----------    -----------    -----------

Other (expense)
     Amortized loan fee (expense)                      (252)            --           (504)            --           (937)
     Interest (expense)                                (608)            --         (1,498)            --         (2,045)
                                                -----------    -----------    -----------    -----------    -----------
       Total other (expense)                           (860)            --         (2,002)            --         (2,982)
                                                -----------    -----------    -----------    -----------    -----------

Net (loss) from continuing operations               (10,853)        (4,944)       (22,735)       (12,220)      (114,921)
                                                -----------    -----------    -----------    -----------    -----------
Discontinued operations:
     (Loss) from discontinued operations
       (including loss on disposal in
       2006 of $52,017)                                  --        (63,751)            --        (76,803)      (121,232)
                                                -----------    -----------    -----------    -----------    -----------

Net (loss)                                      $   (10,853)   $   (68,695)   $   (22,735)   $   (89,023)   $  (236,153)
                                                ===========    ===========    ===========    ===========    ===========


Net (loss) per common share                     $     (0.01)   $     (0.16)   $     (0.01)   $     (0.21)
                                                -----------    -----------    -----------    -----------

Weighted average number of
     common shares outstanding                    1,708,123        429,131      1,708,123        429,131
                                                ===========    ===========    ===========    ===========
</TABLE>




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

                                       3
<PAGE>
<TABLE>
<CAPTION>
                               BIRCH BRANCH, INC.
                          (A Development Stage Company)
                 CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
                                                                                           Period
                                                                                        July 1, 2002
                                                                                          (Date of
                                                                                        Commencement
                                                                For the      For the         of
                                                               Six Months   Six Months  Development
                                                                  Ended        Ended     Stage) to
                                                              December 31, December 31, December 31,
                                                                  2007         2006         2007
                                                               ---------    ---------    ---------
<S>                                                            <C>          <C>          <C>
Cash flows from operating activities:
    Operating activities from continuing operations
        Net (loss)                                             $ (22,735)   $ (89,023)   $(260,528)
        Less: Net (loss) discontinued operations                      --      (76,803)    (121,232)
                                                               ---------    ---------    ---------
    Net (loss) from continuing operations                        (22,735)     (12,220)    (139,296)

    Changes in assets and liabilities continuing operations:
        Amortized loan fee                                           504           --          937
        Accounts payable                                             377       (2,153)       9,033
        Accrued expenses                                           1,498           --        2,045
                                                               ---------    ---------    ---------
    Net cash (used) in operating activities
         by continuing operations                                (20,356)     (14,373)    (127,281)
                                                               ---------    ---------    ---------

Cash flow from financing activities:
        Additional paid-in capital                                    --           --        2,424
        Advances from related party                                   --       16,670       85,936
        Proceeds from shareholder loans                           20,000           --       55,000
                                                               ---------    ---------    ---------
           Net cash provided from financing activities            20,000       16,670      143,360
                                                               ---------    ---------    ---------

    Net cash (used) in activities of continuing operations          (356)       2,297       16,079
                                                               ---------    ---------    ---------

Cash flow from (used in):
        Discontinued operations                                       --       (5,277)     (12,613)
                                                               ---------    ---------    ---------
    Net cash (used in) discontinued operations                        --       (5,277)     (12,613)
                                                               ---------    ---------    ---------

NET (DECREASE) IN CASH                                              (356)      (2,980)       3,466
CASH, BEGINNING OF THE PERIOD                                      6,802        2,980        2,980
                                                               ---------    ---------    ---------
CASH AND CASH EQUIVALENTS, END OF THE PERIOD                   $   6,446    $      --    $   6,446
                                                               =========    =========    =========

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
    Construction in progress financed by advance payable
        from related party including accrued interest          $      --    $      --    $ 406,945
                                                               ---------    ---------    ---------
    Exchange of real estate for note payable and other
        liabilities                                            $      --    $(549,183)   $(549,183)
                                                               ---------    ---------    ---------

SUPPLEMENTAL CASH FLOW
    For the period ended December 31, 2007
        Cash paid for interest                                 $      --    $      --    $      --
                                                               ---------    ---------    ---------
        Cash paid for income taxes                             $      --    $      --    $      --
                                                               ---------    ---------    ---------
</TABLE>

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

                                       4
<PAGE>



                               BIRCH BRANCH, INC.
                          (A Development Stage Company)
               NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 - ORGANIZATION, OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Business
-------------------------

    BIRCH BRANCH, INC. ("the Company") was incorporated in State of Colorado on
September 28, 1989. The Company was formed to pursue real estate development in
Nebraska, and has completed construction on a Studio/private museum/bed and
breakfast rental facility. There were four additional lots included in this
development, which were being held as investments for potential future
development or sale.

    In December, 2006 all of the property described above was sold pursuant to
an Asset Purchase Agreement, dated December 6, 2006, between the Company and the
Company's then President ("Purchaser"). The consideration received by the
Company consisted of 4,167 shares of Company common stock that was owned by the
Purchaser together with the cancellation of a note due to Purchaser with a
principal amount due of $430,000, secured by the Company's assets, all related
accrued interest and the release of the Company from all other liabilities due
to Purchaser.

    The Company currently has no operations and since July 1, 2002 is considered
a development stage enterprise. Effective December 6, 2006 the Company intends
to evaluate structure and complete a merger with, or acquisition of, prospects
consisting of private companies, partnerships or sole proprietorships.

Summary of Accounting Basis of Presentation
-------------------------------------------

    The condensed interim financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures made are adequate to make the information presented not misleading.
The condensed interim financial statements and notes thereto should be read in
conjunction with the financial statements and the notes thereto, included in the
Company's Annual Report to the Securities and Exchange Commission for the fiscal
year ended June 30, 2007, filed on Form 10-KSB on September 28, 2007.

    In the opinion of management, all adjustments necessary to summarize fairly
the financial position and results of operations for such periods in accordance
with accounting principles generally accepted in the United States of America.
All adjustments are of a normal recurring nature. The results of operations for
the most recent interim period are not necessarily indicative of the results to
be expected for the full year.

    Certain prior period amounts have been reclassified to conform to current
period presentation.

Cash
----

    The Company considers all highly liquid instruments purchased with an
original maturity of three months or less to be cash equivalents. The Company
continually monitors its positions with, and the credit quality of, the
financial institutions with which it invests.

Development Stage Company
-------------------------

    The Company is in the development stage and has not yet realized any
revenues from its planned operations. The Company's business plan is to evaluate
structure and complete a merger with, or acquisition of, prospects consisting of
private companies, partnerships or sole proprietorships.

    Based upon the Company's business plan, it is a development stage
enterprise. Accordingly, the Company presents its financial statements in
conformity with the accounting principles generally accepted in the United
States of America that apply in establishing operating enterprises. As a
development stage enterprise, the Company discloses the deficit accumulated
during the development stage and the cumulative statements of operations and
cash flows from inception to the current balance sheet date.

                                       5
<PAGE>
Use of Estimates
----------------

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 revenue and
expenses during the reporting period. Management believes that the estimates
utilized in the preparation of financial statements are prudent and reasonable.
Actual results could differ from these estimates.

Going Concern
-------------

    The accompanying financial statements have been prepared in conformity with
generally accepted accounting principals in the United States of America, which
contemplates continuation of the Company as a going concern. However, the
Company has negative working capital, a stockholders' deficit and no active
business operations, which raises substantial doubt about its ability to
continue as a going concern.

    In view of these matters, the Company will need to continue to be dependent
on its officers, directors and significant shareholders in order to meet its
liquidity needs during the next fiscal year. Although, there is no assurance
that the Company's officers, directors and significant shareholders will fund
the necessary operating capital, or that revenues will commence sufficient to
assure the eventual profitability of the Company. Management believes that this
plan provides an opportunity for the Company to continue as a going concern.

    Certain prior period amounts have been reclassified to conform to current
period presentation.

Change in Control and Plan of Reorganization
--------------------------------------------

    On September 26, 2006 the Company entered into an Agreement and Plan of
Reorganization with Fluid Audio Networks, Inc. ("FAN") under which, following a
proposed 3.75 for 1 forward stock split of the outstanding common stock of the
Company, the Company would issue 10,269,528 shares of common stock to acquire
all of the outstanding common stock of FAN. Additionally, the Company was to
divest itself of its real estate assets by conveying these assets to its
President in exchange for the assumption of all the parent company debt and
cancellation of 16,667 (post split) shares of its common stock held by its
President and transferred to it. The Company's President was to convey for
cancellation an additional 16,667 shares (post split) of the Company's common
stock in exchange for a payment of $500,000.

    The Agreement and Plan of Reorganization was subject to certain significant
contingencies which must have been resolved by November 30, 2006 in order for
the transaction to close. As of November 30, 2006, several contingencies had not
been satisfied, therefore, following a brief extension of time to attempt to
clear the open contingencies, which was not successful, the Agreement and Plan
of Reorganization was terminated without any further commitment or obligation by
the Company.

    On December 6, 2006 a Stock Purchase Agreement (the "Stock Purchase
Agreement") was made by and between Mathis Family Partners, Ltd., Lazzeri Family
Trust and Timothy Brasel and /or assigns, collectively, they are referred to
herein as the ("Investor") and Schumacher & Associates, Inc. Money Purchase Plan
& Trust, a shareholder of the Company and Michael L. Schumacher, the Company's
past President, collectively, they are referred to herein as the ("Seller"). In
the Stock Purchase Agreement, the Seller agreed to sell 254,167 fully paid and
nonassessable shares of the Company's common stock to Investor for an aggregate
of $450,000 cash. As a result of the purchase of the shares of the Company's
common stock Investor owns approximately 59.81% of the issued and outstanding
shares of common stock of the Company which resulted in a change in control of
the Company.

Reverse Stock Split
-------------------

    On June 1, 2007 the shareholders of the Company, at a special meeting,
approved a 1-for-3 reverse stock split of the Company's common stock, no par
value per share, with no change in the number of authorized shares of common
stock and with any fractional shares rounded up to a whole share. The reverse
stock split was effective on June 4, 2007.


                                       6
<PAGE>
    In connection with the 1-for-3 reverse stock split, all historical common
shares amounts have been retroactively restated to reflect the stock split
mentioned above.

NOTE 2 - SHAREHOLDERS' EQUITY (DEFICIT)

    On December 6, 2006, the Company's then President returned 4,167 shares of
the Company's common stock to treasury pursuant to an Asset Purchase Agreement.

    On December 6, 2006 a Stock Purchase Agreement (the "Stock Purchase
Agreement") was made by and between Mathis Family Partners, Ltd., Lazzeri Family
Trust and Timothy Brasel and /or assigns, collectively, they are referred to
herein as the ("Investor") and Schumacher & Associates, Inc. Money Purchase Plan
& Trust, a shareholder of the Company and Michael L. Schumacher, the Company's
past President, collectively, they are referred to herein as the ("Seller"). In
the Stock Purchase Agreement, the Seller agreed to sell 254,167 fully paid and
nonassessable shares of the Company's common stock to Investor for an aggregate
of $450,000 cash. As a result of the purchase of the shares of the Company's
common stock Investor owns approximately 59.81% of the issued and outstanding
shares of common stock of the Company.

    On January 23, 2007, the Company entered into a Revolving Credit Agreement
(the "Revolving Credit Agreement") with Mathis Family Partners, Ltd. ("Mathis"),
Lazzeri Family Trust ("Lazzeri") and Timothy Brasel ("Brasel"), collectively,
they are referred to herein as the "the Lender", to borrow up to $250,000,
evidenced by an unsecured Revolving Loan Note (the "Revolving Loan Note."). In
connection with and as a loan fee for the foregoing unsecured credit facility,
Mathis, Lazzeri and Brasel each received 320,754, 320,754 and 641,506
unregistered shares, respectively, of the Company's common stock. The Company
recorded a Deferred Loan fee of $5,000 that is amortized over the 5 year term of
the Revolving Credit Agreement.

    On June 1, 2007 the shareholders of Company at a special meeting approved a
1-for-3 reverse stock split of our common stock, no par value per share, with no
change in the number of authorized shares of common stock and with any
fractional shares rounded up to a whole share. As a result of the 1-for-3
reverse stock split, an additional 145 shares were issued to existing
shareholders for fractional shares held.

    On June 26, 2007 the Company retired from the treasury 4,167 shares of the
Company's common stock. These shares were originally returned to the Company's
treasury pursuant to a December 6, 2006 Asset Purchase Agreement.

NOTE 3 - DUE TO SHAREHOLDERS

    Prior to December 2006, the Company's then President advanced funds to the
Company for construction in progress and operating expenses. The construction
was completed in September 2005, and the Company's then President and the
Company converted $381,134 of the advances and $48,866 of accrued interest to a
mortgage note payable totally $430,000, collateralized by the land owned by the
Company. During December 2006, the land, the building and improvements were
sold, pursuant to an Asset Purchase Agreement, dated December 6, 2006, to the
Company's then President in exchange for the cancellation of the $430,000
mortgage note, accrued interest of approximately $39,976, additional advances of
approximately $50,739, accounts payable and accrued liabilities of approximately
$3,468, and the return of 12,500 shares of the Company's common stock to the
Company. The sale resulted in a loss to the Company of approximately $52,016 and
an additional paid-in capital of approximately $148,502 from the excess of
liabilities assumed over the net fair value of the property.

    On January 23, 2007, the Company entered into a Revolving Credit Agreement
(the "Revolving Credit Agreement") with Mathis Family Partners, Ltd. ("Mathis"),
Lazzeri Family Trust ("Lazzeri") and Timothy Brasel ("Brasel"), collectively,
they are referred to herein as the "the Lender", to borrow up to $250,000,
evidenced by an unsecured Revolving Loan Note (the "Revolving Loan Note.") All
amounts borrowed pursuant to the Revolving Credit Agreement accrue interest at
7% per annum and all principal and accrued but unpaid interest is payable in
full on demand of the Lender. The Revolving Credit Agreement does not obligate
the Lender to make any loans but any loans made by the Lender to the Company, up
to an outstanding principal balance of $250,000, will be subject to the terms of
the Revolving Credit Agreement and the Revolving Loan Note. In connection with
and as a loan fee for the foregoing credit facility, Mathis, Lazzeri and Brasel
each received 320,754, 320,754 and 641,506 unregistered shares, respectively, of
the Company's common stock. The Company recorded a Deferred Loan fee of $5,000
that is amortized over the 5 year term of the Revolving Credit Agreement. As of
the six months ended December 31, 2007 the principal balance on the note was
$55,000 with available credit of $195,000.

                                       7
<PAGE>
NOTE 4 - COMMITMENTS AND CONTINGENCIES

    The Company uses the offices of certain officers and directors to carry on
day to day business operations for its minimal office facility needs (staff,
supplies and other miscellaneous items). As of December 2006, and in
consideration for these services, the Company pays $1,500 per month to an
affiliate of one of the Company's officers.

NOTE 5 - SUBSEQUENT EVENTS

    In January 2008, the Company received $25,000 in connection with a potential
share exchange transaction with a third party. The potential share transaction
did not close due to contingencies not met by the third party therefore the
$25,000 deposit was forfeited by the third party to the Company.




                                       8
<PAGE>



Item 2 - MANAGEMENT'S DISCUSSION AND ANAYLSIS OR PLAN OF OPERATION

Cautionary Note Regarding Forward-Looking Statements

    Statements contained in this report include "forward-looking statements"
within the meaning of such term in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
involve known and unknown risks, uncertainties and other factors, which could
cause actual financial or operating results, performances or achievements
expressed or implied by such forward-looking statements not to occur or be
realized. Such forward-looking statements generally are based on our best
estimates of future results, performances or achievements, predicated upon
current conditions and the most recent results of the companies involved and
their respective industries. Forward-looking statements may be identified by the
use of forward-looking terminology such as "may," "can," "will," "could,"
"should," "project," "expect," "plan," "predict," "believe," "estimate," "aim,"
"anticipate," "intend," "continue," "potential," "opportunity" or similar terms,
variations of those terms or the negative of those terms or other variations of
those terms or comparable words or expressions.

    Readers are urged to carefully review and consider the various disclosures
made by us in this Quarterly Report on Form 10-QSB and our Form 10-KSB for the
fiscal year ended June 30, 2007, and our other filings with the U.S. Securities
and Exchange Commission. These reports and filings attempt to advise interested
parties of the risks and factors that may affect our business, financial
condition and results of operations and prospects. The forward-looking
statements made in this Form 10-QSB speak only as of the date hereof and we
disclaim any obligation to provide updates, revisions or amendments to any
forward-looking statements to reflect changes in our expectations or future
events.

Results of Operations

For the three months ended December 31, 2007 compared to the three months ended
December 31, 2006

    Revenue. No operating revenues were generated during the three months ended
December 31, 2007 and December 31, 2006.

    Operating Expenses. Total operating expenses from continuing operations were
$9,993 and $4,944, respectively for the quarter ended December 31, 2007 and the
quarter ended December 31, 2006. Operating expenses consist of professional,
management and filing fees.

    Net loss. Net loss decreased for the quarter ended December 31, 2007 by 84%
to $10,853 from $68,695 for the quarter ended December 31, 2006. The decrease in
net loss occurred primarily as a result of a loss from operations discontinued
during the prior year.

For the six months ended December 31, 2007 compared to the six months ended
December 31, 2006

    Revenue. No operating revenues were generated during the six months ended
December 31, 2007 and December 31, 2006.

    Operating Expenses. Total operating expenses from continuing operations were
$20,733 and $12,220, respectively for the six months ended December 31, 2007 and
the six months ended December 31, 2006. Operating expenses consist of
professional, management and filing fees.

    Net loss. Net loss decreased for the six months ended December 31, 2007 by
74% to $22,735 from $89,023 for the six months ended December 31, 2006. The
decrease in net loss occurred primarily as a result of a loss from operations
discontinued during the prior year.

Liquidity and Capital Resources

    As of December 31, 2007, the Company had $6,446 in cash or cash equivalents
and a working capital deficit of ($51,274).

                                       9
<PAGE>
    On January 23, 2007, the Company entered into a Revolving Credit Agreement
with the Company's major shareholders to borrow up to $250,000, evidenced by an
unsecured Revolving Loan Note. All amounts borrowed pursuant to the Revolving
Credit Agreement accrue interest at 7% per annum and all principal and accrued
but unpaid interest is payable in full on demand. As of December 31, 2007,
$55,000 was borrowed under this agreement with $2,045 of interest accrued.

    While future operating activities are expected to be funded by the Revolving
Credit Agreement the Company's request for funds under the Revolving Credit
Agreement are not guaranteed and in that event, additional sources of funding
would be required to continue operations. There is no assurance that the Company
could raise working capital or if any capital would be available at all.

        Off-Balance Sheet Items

        We have no off-balance sheet items as of December 31, 2007.


                                       10
<PAGE>



Item 3 - CONTROLS AND PROCEDURES

         The Company's management, including the Chief Executive Officer and
Chief Financial Officer, has evaluated the effectiveness of the Company's
disclosure controls and procedures (as defined by Rules 13a-15 (e) of the
Securities Exchange Act of 1934) as of December 31, 2007. Their evaluation
concluded that, although these disclosure controls and procedures are not
intended to prevent all errors, emissions or instances of fraud (i) the
disclosure controls and procedures are effective as of December 31, 2007 and
provide reasonable assurance that material information relating to the Company
is made known to management including the Chief Executive Officer and Chief
Financial Officer and;(ii) the financial statements, and other financial
information included in this Quarterly Report on Form 10-QSB, fairly present, in
all material respects, the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this Quarterly
Report on Form 10-QSB.

    There were no significant changes to the Company's internal controls over
financial reporting that occurred during the Company's most recent fiscal
quarter ended December 31, 2007 that have materially affected, or are reasonably
likely to materially affect, the Company's internal controls over financial
reporting.


                                       11
<PAGE>



Part II   OTHER INFORMATION

Item 1. - LEGAL PROCEEDINGS

    None.

Item 2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

    None.

Item 3. - DEFAULTS UPON SENIOR SECURITIES

    None.

Item 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    None.

Item 5. - OTHER INFORMATION

    None.

Item 6. - EXHIBITS

Exhibit
 No       Description
-------   ----------------------------------------------------------------------
31.1      Certification of Company's Chief Executive Officer pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002
31.2      Certification of Company's Chief Financial Officer pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002
32.1      Certification of Company's Chief Executive Officer pursuant to 18
          U.S.C. Section 1350 as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002
32.2      Certification of Company's Chief Financial Officer pursuant to 18
          U.S.C. Section 1350 as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002




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<PAGE>



SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the
small business issuer has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, in Littleton, Colorado on February
14, 2008.

                               BIRCH BRANCH, INC.




                               By      /s/ Earnest Mathis Jr.
                                   --------------------------
                                         Earnest Mathis, Jr.
                                     Chief Executive Officer


                               By     /s/ Robert Lazzeri.
                                   --------------------------
                                     Robert Lazzeri
                                     Chief Financial Officer
                                    (Principal Accounting Officer)



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