U. S. Securities and Exchange Commission
                         Washington, D. C.  20549

                              FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the fiscal year ended December 31, 2002
                               -----------------

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from               to
                                    -------------    -------------

                        Commission File No. 333-49736
                                            ---------

                              BIRCH FINANCIAL, INC.
                              ---------------------
              (Name of Small Business Issuer in its Charter)

         NEVADA                                            91-2077659
         ------                                            ----------
(State or Other Jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                       Identification No.)

                               15722 Kadota Street
                           Sylmar, California  91342
                           -------------------------
                   (Address of Principal Executive Offices)

                  Issuer's Telephone Number:  (800) 959-3701


Securities Registered under Section 12(b) of the Exchange Act:   None
Name of Each Exchange on Which Registered:                       None
Securities Registered under Section 12(g) of the Exchange Act:

                          Common Stock, $0.01 par value

     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 Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

     (1)   Yes  X     No            (2)  Yes  X    No
               ---      ---                  ---      ---

     Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [ ]
     State Issuer's revenues for its most recent fiscal year:   December 31,
2002 - $824,512.
<PAGE>

     State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days.

     March 18, 2003 - $586,231.  There are approximately 4,689,848 shares of
common voting stock of the Company held by non-affiliates.  These shares have
been valued at the average bid and asked prices of the Company's outstanding
common stock at $.125.

               (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                       DURING THE PAST FIVE YEARS)

     Not applicable.

                 (APPLICABLE ONLY TO CORPORATE ISSUERS)

     State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:

                               March 18, 2003

                                 32,109,848

                    DOCUMENTS INCORPORATED BY REFERENCE

          A description of "Documents Incorporated by Reference" is contained
in Item 13 of this Report.

Transitional Small Business Issuer Format   Yes  X   No
                                                ---     ---

<PAGE>
                                  PART I

Item 1.  Description of Business.
         ------------------------

Business Development.
---------------------

          For a discussion of Birch Financial's business development through
the end of the calendar year ended December 31, 2001, see our Annual Report on
Form 10-KSB for the calendar year then ended, which was filed with the
Securities and Exchange Commission on March 15, 2002, and which is
incorporated herein by reference.  See Item 13 of this Report.

          On January 8, 2003, which is subsequent to the period covered by
this Report, we filed with the Securities and Exchange Commission a Form 8-A,
by which we registered our $0.01 par value common stock pursuant to Section
12(g) of the Securities Exchange Act of 1934 (the "1934 Act").  The Form 8-A
is incorporated herein by reference.  See Item 13 of this Report.
PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS

Insurance Premium Financing.
----------------------------

          Neither Birch Financial nor our wholly-owned subsidiary, Birch
Financial, Inc., a Missouri corporation ("Birch Missouri") has significant
assets or operations.  Substantially all of our assets and operations are
those of Birch Financial, Inc., a California corporation ("Birch California"),
which is a wholly-owned subsidiary of Birch Missouri.  Through Birch
California, we are engaged in the business of insurance premium finance for
landscapers, nurseries, golf courses and other members of the "green
industry."

          We offer insurance premium financing services for three insurance
agents:  Landscape Contractor Insurance, Inc. ("LCIS"); Oak Creek Insurance,
which is a "dba" of LCIS, and Ackerman Insurance.  LCIS is wholly owned by
Golden Oak Cooperative Corporation, which also owns approximately 34% of our
outstanding shares.  LCIS constitutes over 90% of our insurance premium
financing revenue.

          As of December 31, 2002, our premium financing receivables totaled
$6,509,314, net of direct charge-offs and allowance for uncollectible accounts
of $27,880, as compared to total receivables of $4,168,618, net of unearned
interest of $95,809 and reserves for a doubtful account of $21,595, at
December 31, 2001.

          Our loans are relatively short term, generally with maturities of
approximately nine months.  Down payments on our loans are generally 20
percent.  Interest rates are tied to the prime lending rate and vary based on
the size of the loan.  We also give a preferential interest rate to members of
the green industry.  If a borrower becomes 20 days late on its loan, we send a
notice advising the borrower that its coverage may be terminated.  Total
insurance policy cancellations are approximately $170,000 per year.

          Our insurance premium financing loans are secured by the unearned
premiums on the insured's insurance policies.  Financed commercial insurance
policies typically require that the insured pay the full premium at or near
the beginning of the policy period.  The insurance company generally earns the
full premium over the course of the policy period.  If the insured cancels the
policy before the end of the policy period, it is usually entitled to a
repayment of the unearned portion of the policy payment as of the date of the
cancellation.

          Depending on the type of insurance coverage, and the terms of the
policy in question, the amount of unearned premium available upon cancellation
of a policy will vary.  Relevant factors include:

          *    the applicable method for measuring unearned premium; for
               example, whether it is prorated over the policy period or
               whether more premium is earned at the beginning of the period;

          *    the amount of the policy period that has lapsed at the time of
               cancellation; and

          *    the loss experience under the policy before the cancellation;
               and variations in the scope of the risks covered after the
               beginning of the policy period.

          In certain cases, the insurance company may earn all or part of the
premium at the inception of the policy.  In either case, less of the unearned
premium would be available for return.

          Because of the relatively short duration of insurance premium
financing loans, most loans are not prepaid.  However, the loan terms and
regulations do not prohibit prepayments or provide for penalties if a borrower
prepays its loan.

Equipment Financing.
--------------------

          During the quarterly period ended June 30, 2000, we began offering
equipment financing services to members of the green industry under the name
"Birch Financial Equipment Financing."  As of December 31, 2002, we had
equipment financing receivables of $828,498.

          Our equipment financing operations focus on equipment financing,
including truck and trailer equipment, lawnmowers, tractors and other
construction equipment.  We may also finance office equipment machines,
including copying, data processing, communication, printing and manufacturing
equipment.  Our contracts will be made exclusively with business users.
Initial terms for truck and trailer equipment typically will range from 24
months to 60 months.  We had 45 outstanding contracts, with total outstanding
balances due within one year of $212,711, at December 31, 2002.

          We maintain written credit policies that we believe are prudent and
customary within the equipment finance industry.  These policies form the
basis for our standardized forms and approval processes.  On occasion, we will
make exceptions to our written credit policy for borrowers with whom we have
had past positive experience. In general, our credit policies encourage the
financing of income-generating equipment.  Within these guidelines, there are
few specific equipment or industry prohibitions.

          Under our current underwriting guidelines, each loan is originated
after a review of the following criteria:

          *    the applicant's ability to repay the loan;

          *    the adequacy of the cash flow from the borrower's operations;
               and

          *    the real and tangible personal property that serve as
               collateral for the loan.

          All equipment is insured, with Birch Financial named as a
beneficiary.

          Birch Financial has created an underwriting model, which
incorporates historical operating results of the borrower and compares
them to industry statistics.  The model helps outline the loan proposal to
fit the approval guidelines.  Loan officers input data provided by potential
borrowers into the underwriting model, and determine whether or not a
loan would qualify under our underwriting guidelines before submission to the
credit group.  This pre-screening process allows for documentation once a loan
is accepted for underwriting.  Our loan originations, or issuances, will
typically range in size from $1,000 to $75,000 for each truck, equipment and
trailer loan.  We anticipate that most borrowers will be multiple unit
operators.

          We anticipate that we will act as a senior secured asset-based
lender.  This means that our claims on the financed equipment will have
priority over the claims of other creditors.  Our initial lending activities
will be in the southwestern United States.  Our office is located in Sylmar,
California.  We will provide asset-based lending to small to medium-sized
businesses with annual revenues ranging from approximately $50,000 to $5
million.

          Our loans will be categorized based on the type of collateral
securing the loan.  We will make revolving loans primarily secured by accounts
receivable and secondarily by inventory.  We also will make term loans secured
by real property, equipment or other fixed assets.  We also may periodically
enter into participations with other commercial finance companies.
Participations are loans that are made by more than one lender and serviced by
one of the participants.  Our loans typically will have maturities of six
months to five years.  We believe that this will provide borrowers with
greater flexibility to manage their borrowing needs.  These loans have an
automatic renewal for a one-year period at the end of the contract term unless
terminated by either party.  Termination usually requires 60 days' written
notice before the end of the term. Equipment loans are term loans typically
with two to five-year amortization periods, but are due and payable upon
termination of the master loan and security agreement.  An amortization period
is the period of time over which the debt is paid.  We are currently issuing
adjustable loans for preferred customers.

          Before a credit line proposal letter is issued and a line of
credit is established, our policy requires a review of the prospective
client, its principals, business and customer base, including a review of
financial statements and other financial records, legal documentation,
samples of invoices and related documentation, operational matters, and
accounts receivable and payable.  In addition, Birch Financial confirms
certain matters relating to the prospective client's business and the
collectability of the client's commercial receivables and other potential
collateral by conducting public record searches for liens, conducting credit
reviews of the prospective client and its principals, contracting major
customers and suppliers to identify potential problems, and conducting an
on-site audit of the prospective client's invoice, bookkeeping and collection
procedures to verify that they are properly conducted and operationally
compatible with our operations.

          After the preliminary review and due diligence, we will:

          *    require the prospective borrower to provide a deposit for fees;

          *    order appraisals if lending against inventory, equipment or
               real estate; and

          *    schedule an audit.

          Our internal auditing staff conducts an audit generally consisting
of a due diligence review of the prospective borrower's accounting and
financial records, including a statistical review of accounts receivable and
charge-off history.  Our internal auditors then submit their audit reports and
work papers to our credit committee for review before we extend credit.  In
making a decision to approve a credit line, Birch Financial establishes credit
limits under the revolving credit line and analyzes the prospective client's
customer base to ensure compliance with our policies generally limiting our
overall exposure to account debtors, especially with respect to privately held
or non-investment grade borrowers.  When deemed necessary for credit approval,
we may obtain guarantees or other types of security from a client or its
affiliates and may also obtain subordination and intercreditor agreements from
the borrower's other lenders.  Under a subordination agreement, one creditor
will agree to make its claims to an asset junior to those of another creditor.
Although our underwriting guidelines and policies provide that, prior to each
loan funding, the account executive assigned to the borrower:

          *    obtain the original of a copy of the invoice to be sent to
               the borrower and the purchase order, if we require one, related
               to the invoice;

          *    confirm the validity and accuracy of a representative
               sampling of invoices; and

          *    mail a letter, on the borrower's letterhead, to the new
               borrower's customer which introduces Birch Financial and
               requests the payment be made directly to us.

          An assigned Birch Financial account executive will monitor each
borrower's credit, collateral and advances.  Account executives will be
required to meet with each of their assigned borrowers at least quarterly to
monitor the borrower's business, physically inspect the borrower's facilities
and equipment, and discuss any potential problem the borrower may be
experiencing.  We will monitor borrowers' accounts receivable using three
forms.  The first form is an accounts receivable aging analysis report, which
is a report that examines the age of unpaid charges.  These reports are
prepared monthly by the loan processor and reviewed by the account executive,
and which includes, among other things, details about account concentrations
and aging trends.  The second is an accounts receivable activity summary
prepared monthly by the loan processor and reviewed by the account executive,
summarizing borrowings, repayments and pledged collateral.  The third is a
daily report prepared by the borrower and reviewed by the account executive to
determine credit availability for a particular day.  In addition to the
foregoing monitoring procedures, interim audits of all borrowers will
be scheduled as deemed appropriate.  Also, each account will be reviewed on
its anniversary date and revolving lines will be reviewed and reconciled on a
monthly basis.  Where liquidation is required for repayment of an outstanding
loan, we will try to obtain consensual possession of the subject collateral
property and joint collections of accounts receivable.  In certain cases,
court action may be required to ensure collections of receivables and
possession of pledged assets.

          We expect to have an ongoing need to finance our lending activities.
We expect this need to increase as the volume of loan originations increases.
Our primary operating cash requirements will include the funding of:

          *    loans pending their sale;

          *    fees and expenses incurred in connection with our
               securitization program;

          *    over-collateralization or reserve account requirements in
               connection with loans pooled and sold;

          *    interest, fees, and expenses associated with our warehouse
               credit and repurchase facilities with certain financial
               institutions;

          *    federal and state income tax payments; and

          *    ongoing administrative and other operating expenses.

          We currently fund these cash requirements primarily by credit
facilities from commercial entities and financial institutions, and anticipate
that we will rely more heavily on securitizations, whole loan sales, and
borrowings as our cash requirements increase.  Securitizations occur when
loans are packaged into bond-like securities for resale to other investors.

          We will depend on our ability to access commercial loans, repurchase
facilities and warehouse lines of credit in order to fund new originations and
purchases. Historically, affiliates of Birch Financial have had various
commercial loans, warehouse lines and reverse repurchase facilities available
to finance truck equipment acquisitions.

          In the future, we may enter into warehouse lines of credit with
commercial finance institutions.  We expect these warehouse lines of credit
to provide additional financing for our continued growth in loan originations.
We also intend to negotiate with a major financial institution to provide
additional financing for our continued growth in loan originations.

          As a fundamental part of its business and financing strategy, Birch
Financial intends to sell substantially all of its loans through
securitization, except for loans held for investments.  We believe that
securitizations provide us with greater operating leverage and a reduced cost
of funds.

          Each loan securitization may have specific credit enhancement
requirements in the form of over-collateralization, which must be met before
we receive cash flows due.  As the securitized assets generate cash flows,
they may be used to pay down the balance of the pass-through certificates
until the ratio of securitized assets to pass-through certificates reaches the
over-collateralization requirement specified in each securitization.
Pass-through certificates are securities that pass income from the debtor,
through intermediaries, to investors.  The over-collateralization amount is
carried on the balance sheet as retained interest in loan securitizations.
After the over-collateralization requirement and the other requirements
specified in the pooling and servicing agreement have been met, we begin to
receive principal and interest on any subordinate bonds of residual interests
retained.  We anticipate that a substantial portion of our gross income will
be recognized as gain on sales of loans, which represent the present value of
the estimated cash flows on the subordinate bonds or residual interests
retained, less origination and underwriting costs. Interest-only and residual
certificates in securitizations of mortgage loans that we retain may be held
as trading securities and adjusted to their respective market value quarterly
with corresponding charges and credits made to income in the adjustment
period.

          Depending on market conditions, we also intend to execute whole loan
sales in which we dispose of our entire economic interest in the loans on a
non-recourse basis, or without personal liability to the borrower, excluding
servicing rights, for cash.  Servicing rights are the rights to bill, collect
payment and administer loans.  Whole loan sale gains and losses will be
recognized at the time of sale and there are generally no residuals.  We seek
to maximize our premium on whole loan sale revenues by closely monitoring
institutional purchasers' requirements and focusing on originating or
purchasing the types of loans that meet those requirements and for which
institutional purchasers tend to pay higher premiums.  Whole loan sales will
be made on a non-recourse basis pursuant to a purchase agreement containing
customary representations and warranties by Birch Financial regarding the
underwriting criteria applied by us and the origination process.  We may be
required to repurchase or substitute loans in the event of a breach of our
representations and warranties.  In addition, we may commit to repurchase or
substitute a loan if a payment default occurs within the first month following
the date the loan is funded, unless other arrangements are made between us and
the purchaser.  We may be required either to repurchase or to replace loans
which do not conform to our representations and warranties in the pooling and
servicing agreements entered into when the loans are pooled and sold through
securitizations.

          Our Servicing Department is responsible for loan accounting,
compliance monitoring and, and if necessary, collections.  Our servicing
operations are located in Sylmar, California.

          The loan servicing function includes monthly invoicing, payment
collections, computing investor payments and processing investor remittances.
The primary method for borrower payments is through automatic electronic
payments.

          Compliance monitoring procedures include a semi-annual review of
each borrower's compliance with stated covenants, including fixed charge
coverage ratios.  If a borrower fails to comply with these covenants, the
borrower will be placed in our credit watch list.  Loans on the credit watch
list are subject to increased scrutiny and monitoring by our servicing
personnel. If a payment has not been received by the due date the loan is
considered in default, and we will aggressively pursue collection procedures,
including collection calls and onsite visits.  We will file the appropriate
lien documentation with the state so that we can repossess the equipment if
necessary.

          During the first month of a delinquency lasting 10 days or more, we
will contact the borrower to determine the reason for the default and the
likelihood and timing of any payment.  We will perform a credit investigation
and obtain updated financial statements from the borrower and current Dun &
Bradstreet and personal credit reports.  Most of our borrowers are also
borrowers in the premium finance division, which gives us a record of payment
for the past two years.  The borrower's bank and major trade creditors
typically will be contacted to provide first-hand verification of the
financial status of the borrower.  We also may retain counsel in the state in
which the borrower is located, if we determine that the borrower or a related
entity is in bankruptcy or there is a reason to believe voluntary or
involuntary bankruptcy will be declared.

          Within 15 to 45 days of the delinquency, an officer of Birch
Financial will meet in person with the delinquent borrower, the nature of the
borrower's financial difficulty will be re-examined and the likelihood of
repayment will be re-evaluated.  We will physically inspect the borrower's
business unit, and industry consultants or other borrowers may be contacted
to evaluate the delinquent business unit.

          After 60 days of delinquency, the loan likely will be accelerated,
meaning that the entire debt becomes due.  The borrower will receive a written
notice demanding payment of this amount. The borrower may also be reminded
that any other loans that the borrower may have from other sources are likely
to be in the default. If it appears unlikely that the borrower will cure the
default, we may decide to negotiate with the borrower to induce the borrower
to offer the business unit for sale to other borrowers.  In this manner the
loans could be assumed.

          Our profits will depend, in part, on the difference, or "spread,"
between the effective rate of interest that we receive on the loans we
originate or purchase and the interest rates payable by us under our warehouse
financing facilities or for securities issued in our securitizations. The
spread can be adversely affected because of interest rate increases during the
period from the date the loans are originated or purchased until the closing
of the sale or securitization of the loans.

          From time to time, we may use various hedging strategies to provide
a level of protection against interest rate risks on our fixed-rate loans.
These strategies may include forward sales of loans or loan-backed
securities, interest rate caps and floors, and buying and selling of futures
and options on futures.  Management will determine the nature and quantity of
hedging transactions based on various factors, including market conditions and
the expected volume of loan originations and purchases.  While we believe that
our hedging strategies will be cost-effective and will provide some protection
against interest rate risks, no hedging strategy can completely protect us
from these risks.  We do not believe that hedging against interest rate risks
associated with adjustable-rate loans likely will be cost-effective, and
accordingly, likely will not utilize the hedging strategies described above
with respect to our adjustable-rate loans.

DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES

Insurance Premium Financing.
----------------------------

          Most of our loans are generated through LCIS, which offers insurance
premium financing loans to allow its commercial customers to purchase the full
amount of insurance coverage that they need, while spreading out the payments
over a period of several months.  LCIS maintains offices in the Bay Area of
California, as well as in Fresno, Granada Hills, Sacramento, and Orange
County, California, and Reno, Nevada.  LCIS has eight agents.

          Our loans are typically originated when one of LCIS' or Ackerman's
insureds signs a premium finance agreement for its policy.  The premium
finance agreement contains a limited power of attorney that gives us the power
to cancel coverage in the event of default, and a collateral assignment to us
of any unearned insurance premium remaining after cancellation.

          When an insured signs a premium finance agreement, it is sent to
Automated Installment Systems ("AIS").  AIS then prepares a check for the
financed premium amount and sends it to us for signature.  The checks are
drawn on our account with Citibank, which is funded through our $10 million
line of credit with Safeco Capital Services.  We have a $10 million promissory
note with Safeco.  Depending on the nature of the advance from Safeco, we pay
interest at the prime rate, provided that the interest rate shall never be
less than 5.5%.  The advances are secured by our interests in our premium
finance agreements with our borrowers and our rights to unearned premiums
under those agreements.

         AIS bills our borrowers monthly.  It sends out each bill 20 days
before payment is due.  Each borrower sends its payment to AIS, which deposits
the payment in our bank account.  All funds due to Safeco are then credited to
its account on a weekly basis.

         We pay AIS $125 each for the first 35 premium finance agreements
processed in any month and $75 for each premium finance agreement processed
after the first 35 in any month, or 3% of any contract below $2,500.  The
yearly average does not exceed $75 per contract.

        Efco, Inc. performs all of our administrative functions that are not
performed by AIS.  These include the preparation of our correspondence and the
billings for our equipment financing operations, as well as miscellaneous
secretarial functions.  In exchange for these services, we pay Efco $24,000,
plus expenses, per year.  We have a written Consultant Agreement with Efco, as
discussed under "Subsequent Event," below.

Equipment Financing.
--------------------

          Birch Financial markets its equipment financing products through its
own in-house sales force.  Our two-person in-house sales force solicits end
user customers and vendors to market equipment finance transactions. In
the future, we intend to expand our marketing efforts to include more
vendors.

          Our broker advisory panel will consist of a group of productive
brokers who are brought together on an annual basis, so that they may have an
open interchange of ideas and information about us and the financing
marketplace.  We believe that the advisory panel will serve a multi-purpose
function by allowing us to reward those brokers that provide us a profitable
base of business, and also provide us with an opportunity to market new ideas
and concepts to those brokers before a general release in the finance
community.  We believe that we will benefit by obtaining information on how
the brokers work with our competitors, such as special programs and market
trends, and this information can then be used to drive future marketing plans.

          We anticipate that we will obtain business through referrals
from banks, venture capitalists, accounting firms, management consultants,
existing borrowers, other finance companies and independent brokers and
insurance agencies.  Our marketing officers will call on our referral
sources to identify and receive introductions to potential clients and to
identify potential clients from database searches.  We expect to compensate
our marketing personnel with what we believe are competitive base salaries and
commissions based on funded transactions in order to motivate and reward the
creation of new business and the renewal of existing business. Such
commissions can be a significant portion of our total compensation paid to our
marketing personnel.  Our marketing personnel have no credit decision
authority.  We believe that our marketing strengths are our rapid response
time and high level of service.

STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICES

          None, not applicable.

COMPETITIVE BUSINESS CONDITIONS

Insurance Premium Financing.
----------------------------

          Our industry is very competitive.  Competitors include national
commercial premium finance companies, companies affiliated with insurance
carriers, independent insurance brokers that offer premium finance services,
banks and other lending institutions.

          Approximately 80% of our insurance premium financing activities take
place in California.  As of December 31, 2001, the most recent date for which
figures are available, the California Department of Financial Institutions had
a record of 68 insurance premium finance companies doing business in that
state.  Based on the number of outstanding loans, we ranked 11th.  Based on
total assets, we were the 15th largest insurance premium financing company in
California on that date.

          We believe that we will be able to continue operating in our
industry.  However, we can not assure you that we will be able to maintain our
current competitive position.

Equipment Financing.
--------------------

          The equipment financing industry is very competitive.  Banks and
commercial finance companies dominate the industry.  As of March 18, 2003,
we had 45 outstanding equipment loans.  Many financing companies left
the market in 2000, due to high competition from banks and home equity loans.
However, we do not expect our competitive position to be significant.

SOURCES AND AVAILABILITY OF RAW MATERIALS

          None; not applicable.

DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS

          Birch Financial provides insurance premium financing loans for the
insureds of only two agents, LCIS and Ackerman.

          We focus our equipment lending efforts on members of the green
industry.  Although there are thousands of green industry members in our area
of operations, our emphasis on that industry will limit the number of
potential borrowers.

PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR
LABOR CONTRACTS, INCLUDING DURATION

          None, not applicable.

NEED FOR ANY GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES.

          None, not applicable.

EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS

          The making, enforcement and collection of insurance premium
financing loans is regulated under state law.  These laws vary by state, but
they generally do the following:

          *    require that insurance premium financing lenders be licensed by
               the state;

          *    restrict the content of premium finance loan agreements and
               impose certain disclosure requirements on the agreements;

          *    limit the amount of finance charges that the lender can impose;

          *    regulate the amount of refunds due to a borrower who prepays
               the premium finance loan prior to maturity;

          *    regulate the amount of late fees, if any, and finance charges
               that a lender may charge when a loan becomes overdue;

          *    regulate the manner of canceling an insurance policy upon non-
               payment of the loan, including a requirement that the lender
               notify the borrower before cancellation; and

          *    allow imposition of penalties, which may be significant, on
               premium finance lenders for violations of the state's premium
               finance laws.

          Federal and state laws also prohibit us from using discriminatory
lending practices and unfair credit practices.  We are licensed as an
insurance premium financing lender in California and Missouri and as an
equipment lender in California.  We believe that we are in compliance with all
applicable laws governing insurance premium financing lenders.  However,
regulations change frequently, and we can not assure you that future
regulations will not hurt our business, either by increasing our compliance
costs or by restricting our operations.

RESEARCH AND DEVELOPMENT

          Birch Financial does not expect that research and development will
be a significant part of its operations.

COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS

          Management does not believe that compliance with environmental
laws will require a significant portion of its resources.

NUMBER OF EMPLOYEES

            Other than our officers, we do not have any employees.

SUBSEQUENT EVENTS

            On Febraury 14, 2003, which is subsequent to the period covered by
this Report, we entered into a Consultant Agreement with Efco, Inc., which is
controlled by our President, Efraim Donitz.  Under the Consultant Agreement,
Efco agreed to act as our financial manager, which encompasses such
administrative duties as the formulation of financial policies and plans and
providing overall direction for accounting, tax, insurance, budget, credit and
treasury functions.  In exchange, Efco is paid $48,000 per year and an annual
incentive fee calculated as follows:

            *  10% of the first $100,000 of profit based on Income Before
Income Tax, increased by the amount of the management fee and all such
expenses that are not directly related to the running of Birch's business, as
stated on our audited financial statements; and

            *  20% of all amounts exceeding $100,000, calculated as set forth
above.

            The incentive fee is limited to a maximum of $200,000 in a given
year.

            Birch also agreed to pay Efco's reasonable business expenses
incurred in connection with Birch's business.  The Consultant Agreement
continues until January 1, 2004, with automatic annual renewals unless either
party gives notice of its desire to terminate the agreement within 90 days of
the next renewal date.  The Consultant Agreement is attached hereto and
incorporated herein by reference.  See the Exhibit Index, Part III, Item 13 of
this Report.

Item 2.  Description of Property.
         ------------------------

          We use a 3,000 square foot office facility in Sylmar, California.
The office is owned by The Donitz Family Trust, which owns approximately three
percent of our outstanding common stock and is controlled by Efraim Donitz,
our President, CEO and Treasurer.  The Donitz Family Trust leases the building
to Efco, Inc., which is also controlled by Mr. Donitz.  We use this facility,
including access to its telephone, fax machine and copier, pursuant to our
Consultant Agreement with Efco.

Item 3.  Legal Proceedings.
         ------------------

          Birch Financial is not a party to any pending legal proceeding.
To the knowledge of management, no federal, state or local governmental agency
is presently contemplating any proceeding against Birch Financial.  None of
our directors, executive officers or affiliates or owners of record or
beneficially of more than five percent of our common stock is a party adverse
to us or has a material interest adverse to us in any proceeding.

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

          No matter was submitted to a vote of the Company's security holders
during the fourth quarter of the calendar year covered by this Report.

                                  PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.
         ---------------------------------------------------------

Market Information
-----------------

          Since June 20, 2000, our common stock has been quoted on the Pink
Sheets, which are published by Pink Sheets LLC.  Our symbol is "BRFL."

          Pink Sheets LLC provided the following quotations.  They do not
represent actual transactions and they do not reflect dealer markups,
markdowns or commissions.


                             STOCK QUOTATIONS

                                            CLOSING BID

Quarter ended:                        High                Low
--------------                        ----                ---
March 31, 2001                        0.125                0.125

June 30, 2001                         0.125                0.125

September 30, 2001                    0.125                0.125

December 31, 2001                     0.125                0.125

March 31, 2002                        0.125                0.125

June 30, 2002                         0.125                0.125

September 30, 2002                    0.15                 0.125

December 31, 2002                     0.125                0.01

          Now that its common stock has been registered under the 1934 Act,
Birch Financial intends to submit for listing on the OTC Bulletin Board of the
NASD.  However, it can provide no assurance that it will meet the reporting
requirements or that any market for its common stock will develop or be
maintained.

          If a public market ever develops in the future, the sale of
"unregistered" and "restricted" shares of common stock pursuant to Rule 144 of
the Commission may hurt any such public market.

          We will have to file quarterly and annual reports with the
Commission in order to have our securities quoted on the OTC Bulletin Board.
These reports must contain financial statements, with year-end financial
statements being audited.  Management expects that the legal and accounting
fees required to prepare and file its periodic reports will total
approximately $10,000 per year.

          There are no outstanding options, warrants or calls to purchase
any of our securities.

Holders
-------

     The number of record holders of the Company's common stock as of the date
of this Report is approximately 485.  This does not include an indeterminate
number of stockholders who may hold their shares in "street name."

Dividends
---------

     The Company has not declared any cash dividends with respect to its
common stock and does not intend to declare dividends in the foreseeable
future.  There are no material restrictions limiting, or that are likely to
limit, the Company's ability to pay dividends on its common stock.

Recent Sales of Unregistered Securities.
----------------------------------------

          The following table provides information about all "unregistered"
and "restricted" securities that Birch Financial has sold during the past
three years, and which were not registered under the 1933 Act:

                                                Number
                              Date              of          Aggregate
Name of Owner                 Acquired          Shares      Consideration
-------------                 --------          ------      -------------


54 stockholders of            4-13-00           31,553,948     (1)
Birch Financial, Inc.,
a Missouri corporation (1)

     (1) We issued these shares in connection with our Agreement and Plan of
         Reorganization with Birch Missouri.  We issued the shares in exchange
         for 31,553,948 shares of Birch Missouri.  See the caption
         "Description of Business."

         Management believes each of the foregoing persons or entities was
either an "accredited investor," or "sophisticated investor" as defined in
Rule 506 of Regulation D of the Securities and Exchange Commission.  Each had
access to all material information about Birch prior to the offer, sale or
issuance of these "restricted securities."  We believe these shares were
exempt from the registration requirements of the Securities Act of
1933, as amended (the "1933 Act"), pursuant to Section 4(2) or 3(b) thereof.
Each of the recipients of these shares completed and signed a suitability
letter with respect to his, her or its qualification to invest in our shares.
Each recipient also executed an investment letter in which such recipient
declared his, her or its investment intent with respect to such shares.

Item 6.  Management's Discussion and Analysis or Plan of Operation.
         ----------------------------------------------------------

Results of Operations.
----------------------

          Calendar year ended December 31, 2002.
          --------------------------------------

          In the calendar year ended December 31, 2002, we received total
financing income of $824,512, of which $796,972 came from our insurance
premium financing contracts and $27,540 came from equipment financing.  We
received an additional $7,790 in interest income from our bank accounts.  We
paid total financing expenses of $214,782 during the period, for gross profit
of $609,730.

          Selling, general and administrative expenses totaled $255,271 during
the calendar year ended December 31, 2002.  Our income before income tax
totaled $362,249.  After provision for income taxes of $149,069, our net
income during the period was $213,180.

          We have established an equipment financing line of credit of up to
$1 million for Golden Oak and Oakwood, at the prime rate.

          Many of our borrowers are involved in construction.  That industry
is sensitive to economic cycles and to bad weather, so either condition would
likely have an effect on our revenues.  However, because our borrowers'
operations include maintenance work and other work that is not very sensitive
to economic conditions, we believe that our operations are somewhat insulated
from an economic downturn.

          Calendar year ended December 31, 2001.
          --------------------------------------

          In the calendar year ended December 31, 2001, we received total
financing income of $616,424, of which $596,832 came from our insurance
premium financing contracts and $19,592 came from equipment financing.  An
additional $5,851 came from interest on our bank accounts.  We paid total
financing expenses of $159,692 during the period, for gross profit of
$456,732.

          Our principal operating expenses during the calendar year ended
December 31, 2001, were $150,825 paid to AIS; a $31,994 bonus paid to Mr.
Donitz; and $24,000 paid to Golden Oak.  Total operating expenses were
$309,408.  Our income before income tax totaled $153,175.  After provision for
income taxes of $59,273, our net income during the period was $93,902.

Liquidity and Capital Resources.
--------------------------------

          Our total assets as of December 31, 2002, were $7,812,327, as
compared to total assets of $4,808,366 at December 31, 2001.  Cash on hand
totaled $284,187 as of that date.  We believe that our current assets will be
sufficient to allow us to operate for the next 12 months.  However, we depend
heavily on our line of credit with Safeco to fund our insurance premium
financing loans.  As of December 31, 2002, our payable on the line of credit
was $4,278,994.  If we were to lose this line of credit for any reason, our
ability to fund these loans would be significantly impaired and our income
would be reduced.

     Safe Harbor Statement.
     ----------------------

          Statements made in this Form 10-KSB which are not purely historical
are forward-looking statements with respect to the goals, plan objectives,
intentions, expectations, financial condition, results of operations, future
performance and business of Birch Financial, including, without limitation,
(i) our ability to gain a larger share of the insurance premium financing and
equipment financing industries and our ability to retain relationships
with LCIS and Ackerman, and (ii) statements preceded by, followed by or that
include the words "may", "would", "could", "should", "expects", "projects",
"anticipates", "believes", "estimates", "plans", "intends", "targets" or
similar expressions.

          Forward-looking statements involve inherent risks and uncertainties,
and important factors (many of which are beyond Birch Financial's control)
that could cause actual results to differ materially from those set forth in
the forward-looking statements, including the following, in addition to those
contained in Birch Financial's reports on file with the Securities and
Exchange Commission: general economic or industry conditions, nationally
and/or in the communities in which Birch Financial conducts business, changes
in the interest rate environment, legislation or regulatory requirements,
conditions of the securities markets, changes in the insurance premium
financing and equipment financing industries, demand for financial services,
competition, our ability to raise capital, changes in accounting
principals, policies or guidelines, financial or political instability, acts
of war or terrorism, other economic, competitive, governmental, regulatory and
technical factors affecting Birch Financial's operations, products, services
and prices.

     Accordingly, results actually achieved may differ materially from
expected results in these statements.  Forward-looking statements speak only
as of the date they are made.  Birch Financial does not undertake, and
specifically disclaims, any obligation to update any forward-looking
statements to reflect events or circumstances occurring after the date of such
statements.

Item 7.  Financial Statements.
         ---------------------

         Financial Statements for the years ended December 31, 2002 and 2001

             Independent Auditors' Report

             Consolidated Balance Sheet - December 31, 2002

             Consolidated Statements of Income for the years ended December
             31, 2002, and 2001

             Consolidated Statements of Stockholders' Equity for the years
             ended December 31, 2002, and 2001

             Consolidated Statements of Cash Flows for the years ended
             December 31, 2002, and 2001

             Notes to Consolidated Financial Statements

<PAGE>


                        BIRCH FINANCIAL, INC.

                  CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2002
               [WITH INDEPENDENT AUDITORS' REPORT]


<PAGE>
                        BIRCH FINANCIAL, INC.


                        Table of Contents

             Independent Auditors' Report                             1

             Consolidated Balance Sheets-December 31, 2002          2-3

             Consolidated Statements of Income for the years ended
             December 31, 2002 and 2001                               4
             Consolidated Statements of Stockholders' Equity for the
             years ended December 31, 2002 and 2001                   5

             Consolidated Statements of Cash Flows for the years
             ended December 31, 2002 and 2001                         6

             Notes to Consolidated Financial Statements            7-11

<PAGE>

                   INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholders
Birch Financial, Inc.
North Hollywood, California

We have audited the accompanying consolidated balance sheet of Birch
Financial, Inc. (a Nevada corporation) and subsidiaries  as of December 31,
2002, and the related consolidated statements of income, stockholders' equity,
and cash flows for the years ended December 31, 2002 and 2001.  These
financial statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
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 financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Birch Financial,
Inc. and subsidiaries as of December 31, 2002, and the results of their
operations and their cash flows for the years ended December 31, 2002 and
2001, in conformity with accounting principles generally accepted in the
United States of America.

                                   /s/Mantyla McReynolds

                                   Mantyla McReynolds
March 14, 2003
Salt Lake City, Utah
<PAGE>
<TABLE>
                        BIRCH FINANCIAL, INC.

                  Consolidated Balance Sheet
                        December 31, 2002

<CAPTION>
ASSETS
                                                    December 31,
                                                       2002
<S>                                                 <C>
CURRENT ASSETS:
Cash-Note 1                                             284,187
Premium financing receivable, net-Note 1              6,509,314
Premium financing cancellation receivable-Note 2        170,121
Equipment financing receivable-current portion-Notes
1 & 4                                                   212,711
                                                      ---------
Total Current Assets                                  7,176,333

Other Assets

Equipment financing receivable, net of current
portion-Notes 1 & 4                                     615,787
Deferred tax asset-Note 3                                20,207
                                                      ---------
Total Other Assets                                      635,994

TOTAL ASSETS                                         $7,812,327
                                                      =========
</TABLE>

          See accompanying notes to financial statements
                                2
<PAGE>
<TABLE>
                        BIRCH FINANCIAL, INC.

                    Consolidated Balance Sheet
                           (continued)
                        December 31, 2002

<S>                                                   <C>
LIABILITIES AND STOCKHOLDERS' EQUITY                   December 31,
                                                           2002
LIABILITIES

Current Liabilities
Bank overdraft                                        $ 887,371
Accounts payable                                          5,371
Unfunded premium financing payable-Note 2               757,908
Line of credit-Note 5                                 4,278,994
Management fees payable-Note 2                           84,062
Notes payable-Note 2                                    695,886
Security deposits payable                                28,254
Income taxes payable                                     65,632
Other accrued liabilities                                 5,418
                                                      ---------
Total Current Liabilities                             6,808,896
                                                      ---------
TOTAL LIABILITIES                                     6,808,896

STOCKHOLDERS' EQUITY

Common stock-63,000,000 shares authorized at $0.01
par; 32,109,848 issued and outstanding                  321,098
Paid in capital                                         251,643
Retained earnings                                       430,690
                                                      ---------
TOTAL STOCKHOLDERS' EQUITY                            1,003,431
                                                      ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $7,812,327
                                                      =========
</TABLE>
          See accompanying notes to financial statements
                                3

<PAGE>

                        BIRCH FINANCIAL, INC.

                  Consolidated Statements of Income
                for the years ended December 31, 2002 and 2001

                                       Year                 Year
                                       Ended                Ended
                                   December 31,            December 31,
                                       2002                  2001

Financing Income
  Premium financing                  $ 796,972            $ 596,832
  Equipment financing                   27,540               19,592
                                      --------             --------
Total Financing Income                 824,512              616,424
                                      --------             --------

Financing Expense
  Premium financing                    194,081              154,474
  Equipment financing                   20,701                5,218
                                      --------             --------
Total Financing Expense                214,782              159,692

Gross Profit                           609,730              456,732

Selling, General and Administrative
Expense                                255,271              309,408
                                      --------             --------
Operating Profit                       354,459              147,324

Other Income
  Interest income                        7,790                5,851
                                      --------             --------
Total Other Income                       7,790                5,851

Income before Tax Provision            362,249              153,175

Provision for Income Taxes            (149,069)             (59,273)
                                      --------             --------
Net Income                            $213,180             $ 93,902
                                      ========             ========
                                      --------             --------
Net income per common share           $   0.01             $   0.00
                                      ========             ========
Weighted average common shares
outstanding                         32,115,710           32,095,611
                                    ==========           ==========

          See accompanying notes to financial statements
                                4
<PAGE>
<TABLE>
                        BIRCH FINANCIAL, INC.

         Consolidated Statements of Stockholders' Equity
                        for the years ended
                     December 31, 2002 and 2001
<CAPTION>
                                           Additional                Total
                       Number of  Common    Paid-in   Retained   Stockholders'
                         Shares   Stock     Capital   Earnings     Equity
<S>                   <C>        <C>       <C>       <C>        <C>
Balance, December 31,
2000                   32,083,048  320,830   220,321   123,608    664,759

Issued stock for
rounding                      500        5        (5)                   0

Issued stock for cash      33,000      330    32,670                33,000

Net income for 2001                                     93,902      93,902
                       ---------- --------  --------  --------   ---------
Balance, December 31,
2001                   32,116,548 $321,165  $252,986  $217,510   $ 791,661

Repurchased and canceled
shares                     (6,700)     (67)   (1,343)               (1,410)

Net income for 2002                                    213,180     213,180
                       ---------- --------  --------  --------   ---------
Balance, December 31,
2002                   32,109,848 $321,098  $251,643  $430,690  $1,003,431
                       ========== ========  ========  ========   =========
</TABLE>
          See accompanying notes to financial statements
                                5
<PAGE>
<TABLE>
                        BIRCH FINANCIAL, INC.

                Consolidated Statements of Cash Flows
                        for the years ended
                     December 31, 2002 and 2001
<CAPTION>
                                                     Year          Year
                                                     Ended         Ended
                                                  December 31,   December 31,
                                                     2002           2001
<S>                                             <C>             <C>
Cash Flows from Operating Activities:

Net Income                                      $  213,180       $   93,902
Adjustments to reconcile net income to net cash
provided by operating activities:
  Depreciation and amortization                          0           51,130
Decrease (increase) in prepaids & other receivables  1,957           25,329
Decrease (increase) in deferred tax asset            1,697          (21,904)
Increase (decrease) in unfunded premium financing
payable                                            (98,622)         324,076
Increase (decrease) in accounts payable & accrued
liabilities                                           (238)          (3,711)
Increase (decrease) in management fees payable      28,268            3,841
Increase (decrease) in security deposits payable    28,254                0
Increase (decrease) in income taxes payable         14,181           44,775
                                                ----------       ----------
  Net Cash Provided by/(Used for) in Operating
  Activities                                       188,677          517,438

Cash Flows from Investing Activities:

Increase in premium financing receivable        (2,353,272         (886,334)
Increase in equipment financing receivable        (592,205)        (207,631)
                                                ----------       ----------
  Net Cash Used for Investing Activities        (2,945,477)      (1,093,965)

Cash Flows From Financing Activities:

Increase in bank overdraft                         631,704           15,159
Increase in line of credit                       1,643,633          493,420
Increase in notes payable                          545,011          150,875
Purchase and cancellation of shares                 (1,410)               0
Issued stock for cash                                    0           33,000
                                                 ---------       ----------
  Net Cash Provided by Financing Activities      2,818,938          692,454

Net Increase in Cash                                62,138          115,927

Beginning Cash Balance                             222,049          106,122
                                                 ---------        ---------
Ending Cash Balance                              $ 284,187        $ 222,049
                                                 =========       ==========

Supplemental Disclosure Information:

Cash paid during the year for interest           $ 206,734        $ 159,692
Cash paid during the year for income taxes       $ 133,191        $  36,402
</TABLE>
          See accompanying notes to financial statements
                                6
<PAGE>
                      BIRCH FINANCIAL, INC.
            Notes to Consolidated Financial Statements
                        December 31, 2002
NOTE 1 Summary of Significant Accounting Policies

     Nature of Operations

     The Company incorporated under the laws of  the State of Nevada on April
     20, 1983, as Import Dynamics, Inc. Between April 30, 1985 and April 17,
     1991, the Company changed its name to Peak Performance Products, Inc.,
     LumaLure Manufacturing, Inc., Sairam Technologies, Ltd., and Balanced
     Environmental Services Tech, Inc. On July 16, 1993, the Company changed
     its name to United States Indemnity & Casualty, Inc. The Company ceased
     operations in 1993 and was inactive until December 1999, when the
     Company acquired Birch Financial, Inc., a Missouri corporation (Birch
     MO), in exchange for 31,553,948 shares of its common stock. The Company
     then changed its name to Birch Financial, Inc.

     Birch MO was incorporated on February 25, 1999 in the State of Missouri.
     Immediately after its incorporation, Birch MO acquired 100% of the
     outstanding stock of Birch Financial, Inc., a California corporation
     (Birch CA), in exchange for its own stock. Neither the Company nor Birch
     MO has significant assets or business activities. The consolidated
     financial statements primarily reflect the financial position, results
     of operations and cash flows of Birch CA.

     Birch CA was incorporated in the State of California on June 13, 1994.
     Its primary business is that of insurance premium financing. Birch CA
     finances insurance premiums that are brokered by the majority
     shareholders of the Company. The premium financing contracts are
     typically financed for a period of nine months and are collateralized by
     insurance policies with a term of twelve months. The Company is also
     engaged in equipment financing. Equipment financing contracts are
     financed for a period of one to five years and are collateralized by
     equipment.

     Accounting Method

     The accompanying financial statements have been prepared in accordance
     with U.S. generally accepted accounting principles applicable to a going
     concern, which contemplates the realization of assets and the
     liquidation of liabilities in the normal course of business.

     Principles of Consolidation

     The accompanying consolidated financial statements include the accounts
     of Birch Financial, Inc. and its 100% owned subsidiaries, Birch MO and
     Birch CA. All significant intercompany balances and transactions are
     eliminated.
                                7
<PAGE>
                      BIRCH FINANCIAL, INC.
            Notes to Consolidated Financial Statements
                        December 31, 2002


NOTE 1    Summary of Significant Accounting Policies (continued)

     Statement of Cash Flows
     Cash is comprised of cash on hand or on deposit in banks.  The Company
     had $284,187 and $222,049 at December 31, 2002 and 2001. At times during
     the year the Company maintains more than $100,000 in one bank. Cash is
     only insured by the Federal Deposit Insurance Corporation (FDIC) up to
     $100,000. Funds in excess of $100,000 are not insured by the FDIC or any
     other Federal agency. As of the balance sheet date the Company had
     $281,858 in a single bank. Cash overdraft consists of outstanding checks
     that have not yet cleared the bank.

     Deferred Income Taxes

     The Company complies with Statement of Financial Accounting Standard
     (SFAS) No. 109, "Accounting For Income Taxes," which requires the asset
     and liability method of accounting for income taxes.  The asset and
     liability method requires that the current or deferred tax consequences
     of all events recognized in the financial statements are measured by
     applying the provisions of enacted tax laws to determine the amount of
     taxes payable or refundable currently or in future years. See Note 3
     below.

     Amortization

     During 2001 the Company adopted Statement of Position (SOP) 98-5
     "Reporting on the Costs of Start-Up Activities", issued by the American
     Institute of Certified Public Accountants, which requires that start up
     costs, including organization costs be expensed as incurred rather than
     amortized over a period not to exceed five years. Consequently, the
     unamortized organization costs existing at December 31, 2000 were fully
     amortized during 2001. Amortization expense amounted to $0 and $51,130
     for the years ended December 31, 2002 and 2001.

     Net Income Per Common Share

     Net income per common share is based on the weighted average number of
     shares outstanding during the periods shown. The Company had no common
     stock equivalents outstanding at December 31, 2002 and 2001.

     Use of Estimates

     The preparation of financial statements in conformity with U.S.
     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.
                                     8
<PAGE>
                      BIRCH FINANCIAL, INC.
            Notes to Consolidated Financial Statements
                        December 31, 2002

NOTE 1    Summary of Significant Accounting Policies (continued)

     Financing Income

     Interest income on premium financing contracts is computed based on the
     method stipulated in the contracts, which in all cases is the "Rule of
     78's" method. The difference between the Rule of 78's method of interest
     recognition and the effective interest method required by U.S. generally
     accepted accounting principles for the period covered by these financial
     statements has been determined to be immaterial.

     Interest income on equipment financing contracts is computed based on
     the effective interest method. Late charges are recognized as income
     when payment for such charges is received. Recoveries of loans and
     receivables previously charged off are recognized as income when
     received.

     Receivables

     In the first quarter of 2002, the Company adopted SOP 01-06, "Accounting
     by Certain Entities (Including Entities with Trade Receivables) That
     Lend to or Finance the Activities of Others" ("SOP 01-06"). SOP 01-06
     addresses disclosures on accounting policies relating to trade accounts
     receivable and is effective prospectively for financial statements
     issued for fiscal years beginning after December 15, 2001. The adoption
     of SOP 01-06 had no impact on our results of operations or financial
     position. Premium financing receivables, which have a term of not more
     than nine months, are stated at outstanding principal balance, net of
     direct charge-offs and allowance for uncollectible accounts. Charge-offs
     are deducted from receivables when they are deemed uncollectible. The
     allowance for uncollectible accounts is calculated as the principal
     amounts 180 days past due, the amount being $27,880 at December 31,
     2002. Management believes this method to be adequate based on the
     Company's history coupled with the Company's ability to cancel insurance
     contracts for non-payment and receive early termination refunds directly
     from the insurance company.

     The Company accounts for impaired loans in accordance with Statement of
     Financial Accounting Standards (SFAS) No. 114 "Accounting by Creditors
     for Impairment of a Loan" as amended by SFAS 118. These standards
     require that all creditors value loans at the loan's fair market value
     if it is probable that the creditor will be unable to collect all
     amounts due according to the terms of the loan agreement. Equipment
     financing receivables, which have a term of one to five years, are
     stated at outstanding principal balance, net of allowance for
     uncollectible accounts, which approximates fair value. Management has
     not included an allowance for uncollectible equipment financing
     receivables due to a history of no credit losses on such loans. These
     loans are secured by equipment and the Company has security deposits in
     the amount of $28,254 at December 31, 2002.

     Web Site Development Costs

     The Company accounts for web site development costs in accordance with
     Emerging Issues Task Force (EITF) No. 00-2. Accordingly, all costs
     incurred in the planning stage are expensed as incurred, costs incurred
     in the web site application and infrastructure development stage are
     accounted for in accordance with Statement of Position (SOP) 98-1 which
     requires the capitalization of certain costs that meet specific
     criteria, and costs incurred in the day to day operation of the web site
     are expensed as incurred.
                                9
<PAGE>
                      BIRCH FINANCIAL, INC.
            Notes to Consolidated Financial Statements
                        December 31, 2002


NOTE 2    Related Party Transactions

     The Company obtains its premium financing business largely through an
     entity that has the same management and directors as the Company. As of
     December 31, 2002 and 2001, the company had an unfunded premium
     financing payable due to this related party of $757,908 and $856,530,
     respectively.

     The Company had a premium financing cancellation receivable due from the
     same related party of $170,121 and $157,545 at December 31 2002 and
     2001. The cancellation receivable is a result of the early termination
     of insurance policies for which the premium has been paid in full.

     The Company borrowed funds from a related party to fund its equipment
     financing business. At December 31, 2002, the Company had notes payable
     to the related party totaling $695,886, due on demand and bearing
     interest at 4.25%.

     The Company is obligated to pay a management fee bonus to a management
     company controlled by its executive officer. The fee is based on the
     Company's net income before tax and certain other expenses. The fee is
     payable annually following the year in which it is earned. For the years
     ended December 31, 2002 and 2001, the Company accrued $84,062 and
     $31,794, and paid $31,794 and $27,953 to the management company. The
     Company also pays a fixed management fee to the same entity in the
     amount of $2,000 per month. The management services received include the
     use of administrative employees and systems as well as office space.

NOTE 3    Accounting for Income Taxes

     In accordance with SFAS 109, the Company has recorded a provision for
     income taxes of $149,069 and $59,273 for the years ended December 31,
     2002 and 2001. Income tax liabilities per tax returns for the same
     periods totaled $146,445 and $81,177. A deferred tax asset has been
     recorded due to timing differences, namely amortization and bad debt
     expense, of the current year, not currently deductible for income tax
     purposes. No valuation allowance has been recorded because management
     believes that there is a greater than 50% likelihood that the deferred
     tax asset will be fully realized in future years. The deferred tax asset
     has been calculated as follows:

                                                        December 31,
                                                            2002

          Deferred federal deductions at 34% rate        $17,185
          Deferred state deductions at 10.84% rate         3,022
                                                         -------
               Total deferred tax asset                  $20,207
                                                         =======
                                10
<PAGE>
                      BIRCH FINANCIAL, INC.
            Notes to Consolidated Financial Statements
                        December 31, 2002




<PAGE>
     NOTE 4    Equipment Financing Receivable

     Scheduled principal reductions of the Company's long-term equipment
     financing receivable at December 31, 2002 are as follows:

                   2003       $212,711
                   2004        234,891
                   2005        201,511
                   2006        149,976
                   2007         29,409
                   Thereafter        0
                              --------
                              $828,498
                              ========

NOTE 5    Line of Credit Arrangement

     The Company has a $10,000,000 line of credit with a financial
     institution for its normal operating needs. Borrowing under this line is
     due on demand, bears interest at Bank of America's prime lending rate
     (4.25% at December 31, 2002) with a floor of 5.5%, and is collateralized
     by the Company's premium financing receivable. As of December 31, 2002
     and 2001, the balance due under the line was $4,278,994 and $2,635,361.

NOTE 6    Stock Transactions

     During August 2001 the Company issued 33,000 shares of its common stock
     for cash at $1.00 per share in a public offering.

     During November 2002 the Company purchased and canceled 6,700 shares of
     its common stock for $1,410 in cash.

<PAGE>

Item 8.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------

          During the past two fiscal years, there have been no changes in our
independent auditor that have not been previously reported in our Annual
Report on Form 10-KSB for the calendar year ended December 31, 2001.  See Item
13 of this Report.

                                 PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------

Identification of Directors and Executive Officers.
---------------------------------------------------

          The following table sets forth the names of all current directors
and executive officers of Birch Financial.  These persons will serve until the
next annual meeting of the stockholders or until their successors are elected
or appointed and qualified, or their prior resignation or termination.
<TABLE>
<CAPTION>
                                            Date of       Date of
                       Positions          Election or   Termination
Name                     Held             Designation   or Resignation
----                     ----             -----------   --------------
<S>                       <C>               <C>           <C>

Efraim Donitz            President           1/14/00       *
                         CEO                 1/14/00       *
                         Treasurer           1/14/00       *
                         Director            1/14/00       *

Nelson L. Colvin         Vice President      1/14/00       *
                         Secretary           1/14/00       *
                         Director            1/14/00       *

Keith L. Walton          Vice President      1/14/00       *
                         Director            1/14/00       *

Barry L. Cohen           Chairman of the     1/14/00       *
                         Board of Directors

Lebo Newman              Director            1/14/00       *

Timothy F. Nord          Director            1/14/00       *

Ronald H. Dietz          Director            1/14/00       *

Richard L. Angelo        Director            1/14/00       *

Frank D. Quaresma        Director            1/14/00       *

Mickey D. Strauss        Director            11/6/01       *

Jon R. Alsdorf           Director            11/6/01       *

</TABLE>

          *    These persons presently serve in the capacities
               indicated.

Business Experience.
--------------------

          Efraim Donitz.  Mr. Donitz is 65 years of age.  In addition to his
duties as President, CFO and Treasurer of Birch Financial, Mr. Donitz has been
the CFO of Oakwood Insurance Co., Ltd., and CLCA Insurance Trust since 1994.
He is also CFO of Golden Oak Co-op Corporation and L.C.I.S.  Mr. Donitz is
also one of the founders of L.C.I.S., which is the insurance agency arm of the
California Landscape Contractors Association.  He has also been the President
of EFCO, Inc. since 1983.  Mr. Donitz is a licensed landscape contractor and
insurance agent.  He holds a degree in Agricultural Business and Management
and a Bachelor of Science in Fruit Industries from California Polytechnic
University.  Mr. Donitz is a past President of the California Landscape
Contractors' Association.
          Nelson L. Colvin.  In addition to his duties as Vice President,
Secretary and Director of Birch Financial, Mr. Colvin, age 65, is
President/CEO of Golden Oak Co-op Corporation, and Secretary of Oakwood
Insurance Co., Ltd. and L.C.I.S.  He has been the executive director of the
CLCA Insurance Trust since 1994.  From 1959 to 1961, Mr. Colvin attended Los
Angeles City College, where he studied accounting and real estate.  He is a
licensed landscape contractor and has been a member of the California
Landscape Contractors Association since 1971.  Mr. Colvin is also a past
President of the California Landscape Contractors' Association.

          Keith L. Walton.  Mr. Walton is 62 years old.  In addition to his
duties as Vice President and Director of Birch Financial, Mr. Walton is
President of Oakwood Insurance Co., Ltd., Director of Golden Oak Co-op
Corporation and L.C.I.S. and President of Land Care Corp. and Brookside
Olympic.  He is also the owner of Chapman Woods Nursery, Inc., which was
founded in 1975.

          Barry L. Cohen.  In addition to his duties as Chairman of the
Board of Directors of Birch Financial, Mr. Cohen, age 61, is Vice President of
Oakwood Insurance Co., Ltd., Director of Golden Oak Co-op Corporation,
director of L.C.I.S. and owner of Diablo Landscape Co.  He has owned B. L.
Cohen Landscape, Inc., since 1972.  Mr. Cohen is a past President of the
California Landscape Contractors Association.

          Lebo Newman.  Mr. Newman is 48 years of age.  In addition to his
duties as a Director of Birch Financial, Mr. Newman is Chairman of Golden Oak
Co-op Corporation.  Mr. Newman owns Liberty Enterprises.  Since 1974, he has
been the President and sole stockholder of R. L. Company, Inc., a California
corporation doing business as Redwood Landscaping, which was sold to Service
Master.  Mr. Newman is a past President of the California Landscape
Contractors' Association.

          Timothy F. Nord.  Mr. Nord is 56 years old.  In addition to his
duties as Director of Birch Financial, Mr. Nord is a Director of Golden Oak
Co-op Corporation, Oakwood Insurance Co., Ltd. and L.C.I.S.  He is also the
Chairman of the Compensation Committee for Birch, Oakwood and Golden Oak.  He
has also owned Nord Landscape Services since 1971.  Mr. Nord is a past
President of the California Landscape Contractors' Association.

          Ronald H. Dietz.  Mr. Dietz is 51 years of age.  In addition to
his duties as Director of Birch Financial, Mr. Dietz is a Director of Golden
Oak Co-op Corporation, Oakwood Insurance Co., Ltd. and L.C.I.S.  He is the
Chairman of L.C.I.S. and of the Audit Committees for Birch, Oakwood and Golden
Oak.  He has been the President and CEO of Dietz Hydroseeding Co. since 1979.
Mr. Dietz is a licensed contractor.  He was the President of the California
Landscape Contractors Association in 1989.

          Richard L. Angelo.  In addition to his duties as Director of Birch
Financial, Mr. Angelo, age 59, is a Director of Golden Oak Co-op Corporation,
Oakwood Insurance Co., Ltd. and L.C.I.S.  He has been the President of Stay
Green Inc. since 1970.  Mr. Angelo is a past President of the California
Landscape Contractors Association.

          Frank D. Quaresma.  In addition to his duties as Director of Birch
Financial, Mr. Quaresma, age 48, is Chairman of the Board of Golden Oak Co-op
Corporation, and a Director of Oakwood Insurance Co., Ltd. and L.C.I.S.  He
has owned Live Oak Landscape since 1977.

          Mickey D. Strauss.  Mr. Strauss, age 57, has been the Chief
Executive Officer of American Landscape, Inc., since 1973.  He is a past
President of the California Landscape Contractors Association and has been
voted Man of the Year by the San Fernando Valley chapter of that association.

          Jon R. Alsdorf.  Mr. Alsdorf is 57 years of age.  He has been a
licensed contractor in Fresno, California  since 1984.  He is a Director of
Golden Oak Co-op Corporation and L.C.I.S. and is a past President of the
California Landscape Contractors Association.

Significant Employees.
----------------------

          Birch Financial does not employ any non-officers who are expected
to make a significant contribution to its business.

Family Relationships.
---------------------

          There are no family relationships between any of the officers
and/or directors of Birch Financial.

Involvement in Certain Legal Proceedings.
-----------------------------------------

          During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of
Birch Financial:

          (1) was a general partner or executive officer of any business
against which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;

          (2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);

          (3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or

          (4) was found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.

Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------

          On or about February 13, 2003, each of our directors, executive
officers and 10% stockholder filed with the Securities and Exchange Commission
a Form 3 Initial Statement of Beneficial Ownership of Securities disclosing
the Birch Financial securities that he/it beneficially owned as of that date.



Item 10. Executive Compensation.
         -----------------------

         The following table sets forth the aggregate compensation that we
have paid for services rendered during the periods indicated:

                        Summary Compensation Table
                        --------------------------

                                      Long Term Compensation
                    Annual Compensation   Awards  Payouts
(a)             (b)   (c)   (d)   (e)   (f)   (g)   (h)    (i)
                                              Secur-
                                              ities        All
Name and   Year or               Other  Rest- Under- LTIP  Other
Principal  Period   Salary Bonus Annual rictedlying  Pay- Comp-
Position   Ended      ($)   ($)  Compen-Stock Optionsouts ensat'n
-----------------------------------------------------------------

Efraim       12/31/00  -0-   (1)   -0-   -0-    -0-       -0-  -0-
Donitz,      12/31/01 24,000 (1)   -0-   -0-    -0-       -0-  -0-
CEO, Pres.   12/31/02 24,000 (1)   -0-   -0-    -0-       -0-  -0-
and Treasurer

Nelson L.    12/31/00  -0-   -0-   -0-   -0-    -0-       -0-  -0-
Colvin,      12/31/01  -0-   -0-   -0-   -0-    -0-       -0-  -0-
Vice Pres.   12/31/02  -0-   -0-   -0-   -0-    -0-       -0-  -0-
and Secretary

Keith L.     12/31/00  -0-   -0-   -0-   -0-    -0-       -0-  -0-
Walton,      12/31/01  -0-   -0-   -0-   -0-    -0-       -0-  -0-
Vice Pres.   12/31/02  -0-   -0-   -0-   -0-    -0-       -0-  -0-


     (1)  We pay our President, Efraim Donitz, 10% of our first $100,000
          of pre-tax earnings and 20% of all pre-tax earnings in excess
          of $100,000.  The amount payable to Mr. Donitz thereunder is capped
          at $200,000 per year.  For the calendar year ended December 31,
          2002, we have accrued $84,062, which we expect to pay in April,
          2003.  For the calendar year ended December 31, 2001, we accrued and
          paid $31,794 to Mr. Donitz under this arrangement.

     (2)  An entity that is controlled by Mr. Donitz receives a management fee
          of $2,000 per month.  The fee is paid in consideration of the use of
          that entity's administrative employees and systems, as well as
          office space.

Compensation of Directors.
--------------------------

          We do not have any arrangements to compensate our directors for any
services provided as a director.  We do not pay any additional amounts to our
directors for committee participation or special assignments.

Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
-------------

          Our officers are our only employees.  We do not have any written
employment agreements or any change-in-control arrangements with our officers.
However, we do have a Consultant Agreement with Efco, Inc., which is
controlled by our President, Efraim Donitz.  See the Exhibit Index, Item 13 of
this Report.

Item 11. Security Ownership of Certain Beneficial Owners and Management.
         ---------------------------------------------------------------

Security Ownership of Certain Beneficial Owners.
------------------------------------------------

          The following table sets forth the shareholdings of each of our
stockholders who is known to beneficially own more than five percent of our
outstanding common stock as of March 18, 2003.  Except as otherwise
indicated, to the knowledge of management, each of these stockholders has sole
investment and sole voting power over the shares indicated.

<TABLE>
<CAPTION>
                                Number                 Percentage
Name and Address      of Shares Beneficially Owned      of Class
----------------      ----------------------------      --------
<S>                                <C>                        <C>

Golden Oak Cooperative             10,920,000                 34%
Corporation (1)
17029 Chatsworth St.
Granada Hills, CA 91344

Oakwood Insurance Co., Ltd. (1)    10,500,000                 33%
P.O. Box HM 1538
Hamilton HM FX, Bermuda
                                   ----------                -----
          TOTALS                   21,420,000                 67%

</TABLE>

          (1) Golden Oak beneficially owns approximately 49% of Oakwood.

Security Ownership of Management.
---------------------------------

          The following table sets forth the shareholdings of our directors
and executive officers as of March 18, 2003.  Each of these persons has sole
investment and sole voting power over the shares indicated.

<TABLE>
<CAPTION>

                                   Number              Percentage
Name and Address        of Shares Beneficially Owned    of Class
----------------        ----------------------------   ----------
<S>                           <C>                        <C>

Efraim Donitz                   1,000,000                  3%
The Donitz Family Trust
12419 Debby St.
No. Hollywood, CA 91606

Nelson L. Colvin                  500,000 (1)              1.5%
8754 Jumilla Av
Northridge, CA 91324

Keith L. Walton                 1,000,000                  3%
800 N. Meadowpacs Rd.
Walnut, CA 91789

Barry L. Cohen                    100,000 (2)              0.3%
19519 Kenosha Court
Saratoga, CA 95070

Lebo Newman                     1,000,000                  3%
2540 Bennett Ridge Rd.
Santa Rosa, CA 95404

Timothy F. Nord                   100,000 (3)              0.3%
2425 Alder Street
Bakersfield, CA 93301

Ronald H. Dietz                   300,000 (4)              0.9%
8244 E. Hillsdale Drive
Orange, CA 92869

Richard L. Angelo                    -0-                    -0-
11774 Monte Leon Way
Northridge, CA 91326

Frank D. Quaresma               1,000,000                  3%
3342 McDonald Ave.
Modesto, CA 95358

Mickey D. Strauss                    -0-                    -0-
7949 Deering Avenue
Canoga Park, CA  91304

Jon R. Alsdorf                       -0-                    -0-
4235 West Alamos
Fresno, CA  93722

                                ---------                 -----
All directors and executive
officers as a group
(11 persons)                   5,000,000                  15.6%

</TABLE>

          (1) These shares are held jointly with Mr. Colvin's wife.

          (2) These shares are held jointly with Mr. Cohen's wife.

          (3) These shares are held jointly with Mr. Nord's wife.

          (4) These shares are held of record by the Doherty Dietz 1998 Loving
              Family Trust, which Mr. Dietz controls.

Changes in Control.
-------------------

          There are no present arrangements or pledges of the Company's
securities which may result in a change in control of the Company.

Item 12. Certain Relationships and Related Transactions.
         -----------------------------------------------

Transactions with Management and Others.
----------------------------------------

          Except as indicated below, during the calendar year ended December
31, 2002, there were no material transactions, series of similar transactions,
currently proposed transactions, or series of similar transactions, to which
the Company or any of its subsidiaries was or is to be a party, in which the
amount involved exceeded $60,000 and in which any director or executive
officer, or any security holder who is known to the Company to own of record
or beneficially more than five percent of the Company's common stock, or any
member of the immediate family of any of the foregoing persons, had a material
interest.

          Pursuant to our Consultant Agreement with Efco, Inc., an entity that
is controlled by our President, CEO and Treasurer, we pay Efco based on our
pre-tax earnings.  We pay Mr. Donitz 10% of the first $100,000 of pre-tax
earnings, and 20% of any pre-tax earnings above $100,000.  The amount payable
under this arrangement is capped at $200,000 per year.  Each year, we also pay
Efco an administration fee of $24,000, plus expenses, under the Consultant
Agreement.  See the subheading "Subsequent Event" of the caption "Description
of Business" and the caption "Executive Compensation" of this Report.

          Golden Oak owns approximately 35% of our outstanding shares.  LCIS,
which is one of the two insurers for whom we offer premium financing services,
is a wholly-owned subsidiary of Golden Oak. As of December 31, 2002, and 2001,
we had unfunded premium financing payables to LCIS of $757,908 and $856,530,
respectively.  As of December 31, 2002, and 2001, we had a cancellation
receivable from LCIS of $170,121 and $157,545, respectively.

          As of December 31, 2002, we had a note payable to Golden Oak in the
amount of $695,886.  The note is payable on demand and bears interest at the
rate of 4.25%.  These funds have been used to fund our equipment financing
business.

          Each of our directors and executive officers is also a director or
executive officer of Golden Oak and Oakwood.  Golden Oak is owned by the
employer members of the California Landscape Contractors' Association.

Certain Business Relationships.
-------------------------------

          Except as indicated under the heading "Transactions with Management
and Others," during the calendar year ended December 31, 2002, there were no
material transactions, series of similar transactions, currently proposed
transactions, or series of similar transactions, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.

Indebtedness of Management.
---------------------------

          Except as indicated under the heading "Transactions with Management
and Others," during the calendar year ended December 31, 2002, there were no
material transactions, series of similar transactions, currently proposed
transactions, or series of similar transactions, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.

Parents of the Issuer.
----------------------

          Birch Financial has no parents, except to the extent that Golden Oak
and Oakwood may be deemed to be parents due to their collective ownership of
approximately 67% of our outstanding shares.

Transactions with Promoters.
----------------------------

          Except as indicated under the heading "Transactions with Management
and Others," during the calendar year ended December 31, 2002, there were no
material transactions, series of similar transactions, currently proposed
transactions, or series of similar transactions, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any promoter or founder, or any member of the
immediate family of any of the foregoing persons, had a material interest.

Item 13. Exhibits and Reports on Form 8-K.
         ---------------------------------

Reports on Form 8-K
-------------------

          None; not applicable.

Exhibits
--------

Exhibit
Number               Description
------               -----------

10                   Consultant Agreement with Efco, Inc., dated February 14,
                     2003

DOCUMENTS INCORPORATED BY REFERENCE

                                         Where incorporated in
     Document                            this Report*
     --------                            -----------

Annual Report on Form 10-KSB             Part I, Item 1
for the calendar year ended
December 31, 2002

Form 8-A                                 Part I, Item 1

          *  These documents and related exhibits have previously been filed
             with the Securities and Exchange Commission and are incorporated
             herein by this reference.

Item 14. Controls and Procedures.
         ------------------------

          (a)  Evaluation of Disclosure Controls and Procedures.  Our Chief
Executive Officer/Treasurer has evaluated the Company's disclosure controls
and procedures within 90 days prior to the date of this report, and has
concluded that these controls and procedures are effective.

          (b)  Changes in Internal Controls.  There were no significant
changes in the Company's internal controls or, to the Company's knowledge, in
other factors that could significantly affect its disclosure controls and
procedures subsequent to the evaluation date.

                              SIGNATURES

          In accordance with Section 13 or 15(d) of the Exchange Act, the
Company caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                       BIRCH FINANCIAL, INC.


Date:  3/28/03                         /s/ Efraim Donitz
      -------------                    -------------------
                                       Efraim Donitz
                                       Chief Executive Officer, President,
                                       Treasurer and Director

          In accordance with the Exchange Act, this Report has been signed
below by the following persons on behalf of the Company and in the capacities
and on the dates indicated:

                                        BIRCH FINANCIAL, INC.


Date: 3/28/03                           /s/ Efraim Donitz
     -------------                      -------------------
                                        Efraim Donitz
                                        Chief Executive Officer, President,
                                        Treasurer and Director


Date:  3/28/03                          /s/ Nelson L. Colvin
      -------------                     ---------------------
                                        Nelson L. Colvin
                                        Vice President, Secretary and Director


Date:  3/28/03                          /s/ Barry L. Cohen
      -------------                     --------------------
                                        Barry L. Cohen
                                        Chairman of the Board of Directors


Date:  3/28/03                          /s/ Keith L. Walton
      -------------                     --------------------
                                        Keith L. Walton
                                        Vice President and Director


Date:  3/28/03                          /s/ Ronald H. Dietz
      -------------                     --------------------
                                        Ronald H. Dietz
                                        Director


Date:  3/28/03                          /s/ Lebo Newman
      -------------                     --------------------
                                        Lebo Newman
                                        Director

<PAGE>
                   CERTIFICATION PURSUANT TO
         SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

     I, Efraim Donitz, President, Chief Executive Officer and Treasurer of
Birch Financial, Inc. (the "Registrant"), certify that:

     1.   I have reviewed this Annual Report on Form 10-KSB of the Registrant;

     2.   Based on my knowledge, this Annual Report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Annual Report;

     3.   Based on my knowledge, the financial statements, and other
financial information included in this Annual Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
Annual Report;

     4.   I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the Registrant and I have:
     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the Registrant, including its
          consolidated subsidiaries, is made known to me by others within
          those entities, particularly during the period in which this
          Annual Report is being prepared;

     b)   evaluated the effectiveness of the Registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this Annual Report (the "Evaluation Date"); and

     c)   presented in this Annual Report my conclusions about the
          effectiveness of the disclosure controls and procedures based on
          My evaluation as of the Evaluation Date;

     5.   I have disclosed, based on my most recent evaluation, to the
Registrant's auditors and the audit committee of Registrant's board of
directors (or persons performing the equivalent function);

     a)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the Registrant's
          ability to record, process, summarize and report financial data
          and have identified for the Registrant's auditors any material
          weaknesses in internal controls; and

     b)   any fraud, whether or not material, that involves management or
          other employees who have a significant role in the Registrant's
          internal controls; and

     6.   I have indicated in this Annual Report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Dated:  March 28, 2003               Signature:  /s/ Efraim Donitz
                                                --------------------------
                                                Efraim Donitz
                                                President, CEO and Treasurer
<PAGE>


                    CERTIFICATION PURSUANT TO
                     18 U.S.C. SECTION 1350,
                      AS ADOPTED PURSUANT TO
          SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Annual Report of Birch Financial, Inc. (the
"Registrant") on Form 10-KSB for the year ending December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Efraim Donitz, President, CEO and Treasurer of the Registrant, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
     (2)  The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


/s/Efraim Donitz
----------------
Efraim Donitz
President, CEO and Treasurer
3/28/03