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


                                FORM 10-QSB


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

     For the quarterly period ended June 30, 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 I.D. No.)
    incorporation or organization)

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

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


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

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


             APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                PROCEEDINGS DURING THE PRECEDING FIVE YEARS

                              Not applicable.


                   APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:

                               June 30, 2002

                                32,116,548
                                ----------

                      PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements.
- -------------------------------

          The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management, and commence on the
following page, together with Related Notes.  In the opinion of management,
the Financial Statements fairly present the financial condition of the
Registrant.





                              BIRCH FINANCIAL, INC.
           (Formerly known as United States Indemnity & Casualty, Inc.)

                    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 June 30, 2002






                                BIRCH FINANCIAL, INC.
           (Formerly known as United States Indemnity & Casualty, Inc.)
                      Condensed Consolidated Balance Sheet
                                 June 30, 2002

                                                          
                                                               June 30, 2002
ASSETS

   Current Assets

      Cash                                                   $    100,283

      Premium financing receivable, net                         5,897,699

      Premium financing cancellation receivable                   182,373

      Equipment financing receivable - current portion            144,104

      Prepaids and late charges receivable                         59,366

          Total Current Assets                                  6,383,825

   Other Assets

      Equipment financing receivable, net of current portion      433,115

      Deferred tax asset                                           21,904

          Total Other Assets                                      455,019

TOTAL ASSETS                                                 $  6,838,844



    Unaudited - see accompanying notes to financial statements









                             BIRCH FINANCIAL, INC.
          (Formerly known as United States Indemnity & Casualty, Inc.)
                      Condensed Consolidated Balance Sheet
                                  (continued)
                                 June 30, 2002

                                                          
                                                               June 30, 2002

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

   Current Liabilities

     Bank overdraft                                         $    578,267

      Unfunded premium financing payable                         462,107

      Line of credit                                           4,352,605

      Management fees payable                                     26,898

      Notes payable                                              478,338

      Income taxes payable                                        53,516

      Other accrued liabilities                                   18,931

          Total Current Liabilities                            5,970,662


TOTAL LIABILITIES                                              5,970,662

STOCKHOLDERS' EQUITY

  Common stock - 63,000,000 shares authorized at $0.01 par;
   32,116,548 shares issued and outstanding                      321,165

  Paid in capital                                                252,986

  Retained earnings                                              294,031

TOTAL STOCKHOLDERS' EQUITY                                       868,182

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                                         $ 6,838,844


          Unaudited - see accompanying notes to financial statements










                               BIRCH FINANCIAL, INC.
           (Formerly known as United States Indemnity & Casualty, Inc.)
                 Condensed Consolidated Statements of Income
                   for the six months ended June 30, 2002 and 2001


                                         Six months       Six months
                                           ended            ended
                                          June 30,         June 30,
                                            2002             2001

                                                       

Financing Income
   Premium financing                    $   381,473          $   302,066

   Equipment financing                       19,104                4,160

Total Financing Income                      400,577              306,226


Financing Expense
   Premium financing                        151,751               94,671

   Equipment financing                        6,759                    0

Total Financing Expense                     158,510               94,671


Gross Profit                                242,067              211,555

Selling, General and
 Administrative Expense                     112,551              124,411

Operating Profit                            129,516               87,144


Other Income

   Interest income                              521                2,328

Total Other Income                              521                2,328


Income Before Tax Provision                 130,037               89,472


Provision for Income Taxes                  (53,516)             (29,000)


Net Income                              $    76,521          $    60,472

Net income per common share             $      0.00          $      0.00

Weighted average common
 shares outstanding                      32,116,548           32,083,048




    Unaudited - see accompanying notes to financial statements







                           BIRCH FINANCIAL, INC.
           (Formerly known as United States Indemnity & Casualty, Inc.)
                  Condensed Consolidated Statements of Income
                  for the three months ended June 30, 2002 and 2001


                                        Three months         Three months
                                           ended                ended
                                          June 30,            June 30,
                                            2002                2001

                                                       

Financing Income

   Premium financing                    $     210,083        $     156,235

   Equipment financing                         11,013                2,979

Total Financing Income                        221,096              159,214

Financing Expense

   Premium financing                           93,573               42,002

   Equipment financing                          4,332                    0

Total Financing Expense                        97,905               42,002

Gross Profit                                  123,191              117,212

Selling, General and
 Administrative Expense                        59,015               68,936

Operating Profit                               64,176               48,276

Other Income

   Interest income                                480                1,578

Total Other Income                                480                1,578

Income Before Tax Provision                    64,656               49,854

Provision for Income Taxes                    (26,454)             (17,340)

Net Income                              $      38,202        $      32,514

Net income per common share             $        0.00        $        0.00

Weighted average common
 shares outstanding                        32,116,548           32,083,048



    Unaudited - see accompanying notes to financial statements






                                 BIRCH FINANCIAL, INC.
           (Formerly known as United States Indemnity & Casualty, Inc.)
                Condensed Consolidated Statements of Cash Flows
                            for the six months ended
                              June 30, 2002 and 2001



Cash Flows from Operating Activities:   Six months           Six months
                                          ended                 ended
                                        June 30, 2002        June 30, 2001

                                                       

Net Income                              $     76,521         $     60,473

Adjustments to reconcile net income
 to net cash provided by
 operating activities:

    Depreciation and amortization                  0                7,000

    Decrease (increase) in prepaids
     & other receivables                     (57,409)               8,132

    Increase (decrease) in unfunded
     premium financing payable              (394,423)            (124,147)

    Increase (decrease) in accounts
     payable & accrued liabilities             7,904               14,356

    Increase (decrease) in management
     fees payable                            (28,896)             (22,953)

    Increase (decrease) in income
     taxes payable                             2,065               (6,676)

       Net Cash Provided by/(Used for)
        in Operating Activities             (394,238)             (63,815)

Cash Flows from Investing Activities:

   Increase in premium
    financing receivable                  (1,753,909)            (756,612)

   Increase in equipment
    financing receivable                    (340,926)            (127,866)

      Net Cash Used for
       Investing Activities               (2,094,835)            (884,478)


Cash Flows from Financing Activities:

    Increase in bank overdraft               322,600              430,392

    Increase in line of credit             1,717,244              481,479

    Increase in notes payable                327,463                    0

       Net Cash Provided by
        Financing Activities               2,367,307              911,871

Net Increase in Cash                        (121,766)             (36,422)

Beginning Cash Balance                       222,049              106,122

Ending Cash Balance                     $    100,283         $     69,700



     Unaudited - see accompanying notes to financial statements




     PRELIMINARY NOTE

     The accompanying condensed consolidated financial statements have been
     prepared without audit, pursuant to the rules and regulations of the
     Securities and Exchange Commission.   The interim financial statements
     reflect all adjustments which are, in the opinion of management,
     necessary to a fair statement of the results for the period. Certain
     information and disclosures normally included in financial statements
     prepared in accordance with U.S. generally accepted accounting principles
     have been condensed or omitted.  It is suggested that these condensed
     financial statements be read in conjunction with the financial statements
     and notes thereto included in the Company's Annual Report on Form 10-KSB
     for the year ended December 31, 2001.



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

Plan of Operation
- -----------------

          Premium Finance Division.
          -------------------------

          During the quarterly period ended June 30, 2002, we received
$210,083 in interest income from our LCIS premium financing contracts, and our
net premium financing receivable with LCIS was $5,897,699.

          By December, 2002, we plan to expand our premium finance activities
with LCIS to $15 million.  We base this projection on expected sales
by LCIS of $40 million, with about half of that amount being liability and
auto insurance.  We expect to finance about 80% of these premiums, or
approximately $18.1 million.  However, these figures are projections only, and
we can not guarantee that we will be able to reach these levels of revenue.

          We are negotiating with other agencies to provide premium financing
for associations that they represent.  However, we can not assure you that we
will be able to get these associations' business or that, if we do, we will be
able to finance this level of gross premiums.

          We have renegotiated our line of credit with Safeco for all
contract financing to be provided at the prime interest rate, with a floor of
5.5%.  We have increased the Safeco line of credit from $5 million to $7.5
million.

          Equipment Finance Division.
          ---------------------------

          At June 30, 2002, we had a total of $577,219 in equipment financing
receivables.  We have had discussions with equipment dealers in Southern
California.  These dealers sell about $10 million of equipment per year.  One
dealer alone wants us to help finance about four machines per month, which we
estimate will total approximately $1,152,000 per year.

          We do not have a separate line of credit for our equipment financing
operations.  The amount that we are able to fund is limited to the amount of
funds that we can borrow from a related party.  In total, we hope to finance
at least $750,000 by December, 2002.  However, we can not assure you that we
will reach any specific dollar amount.

          We also intend to offer lines of credit to companies with "Class A"
credit ratings.  We hope that this will generate about $2 million in
additional revenues, although we can not provide any guarantees in this
regard.

         We believe that our equipment finance division will grow
substantially through December 31, 2002.  We expect funds to become available
as we sell bundled loans to banks and other financial institutions, retaining
the servicing and loan fees.

         The foregoing discussion contains forward-looking statements that
discuss, among other things, future expectations and projections regarding
future developments, operations and financial conditions. All forward-looking
statements are based on management's existing beliefs about present and future
events outside of management's control and on assumptions that may prove to be
incorrect.  If any underlying assumptions prove incorrect, Birch Financial's
actual results may vary materially from those anticipated, estimated,
projected or intended.

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

          In the quarterly period ended June 30, 2002, we received total
financing income of $221,096, of which $210,083 came from our insurance
premium financing contracts and $11,013 came from equipment financing.  During
the quarterly period ended June 30, 2001, these amounts were $159,214;
$156,235; and $2,979, respectively.

          Financing expenses during the quarterly periods ended June 30,
2002, and June 30, 2001, were $97,905 and $42,002, respectively.  Selling,
general and administrative expenses decreased to $59,015 during the June 30,
2002 quarter, from $68,936 in the year-ago period.

          Our net income before income tax totaled $64,656 in the quarterly
period ended June 30, 2002, as compared to $49,854 in the June 30, 2001,
quarter.  After provision for income taxes of $26,454 and $17,340, our
net income during the June 30, 2002, and 2001, periods was $38,202, and
$32,514, respectively.

          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.

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

          Our total assets as of June 30, 2002, were $6,838,844.  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 June 30, 2002, our payable
on the line of credit was $4,352,605.  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.

                        PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.
- ----------------------------

          None; not applicable.

Item 2.   Changes in Securities and Use of Proceeds.
- ----------------------------------------------------

          None; not applicable.

Item 3.   Defaults Upon Senior Securities.
- ------------------------------------------

          None; not applicable.

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

          None; not applicable.

Item 5.   Other Information.
- ----------------------------

          None; not applicable.

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

          (a)  Exhibits.

               None.

          (b)  Reports on Form 8-K.

               None.


                               SIGNATURES

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

                                      BIRCH FINANCIAL, INC.


Date: 8/8/02                          By: /s Efraim Donitz
     ---------                           -----------------------------------
                                         Efraim Donitz, CEO, President,
                                         Treasurer and Director


Date: 8/8/02                          By: /s/ Nelson L. Colvin
     ---------                           -----------------------------------
                                         Nelson L. Colvin, Vice President,
                                         Secretary and Director


Date: 8/8/02                          By: /s/ Barry L. Cohen
     ---------                           -----------------------------------
                                         Barry L. Cohen, Chairman of the Board
                                         of Directors


Date: 8/8/02                          By: /s/ Keith L. Walton
     ---------                           -----------------------------------
                                         Keith L. Walton, Vice President and
                                         Director


Date: 8/8/02                          By: /s/ Ronald H. Dietz
     ---------                           -----------------------------------
                                         Ronald H. Dietz, Director


Date: 8/8/02                          By: /s/ Lebo Newman
     ---------                           -----------------------------------
                                         Lebo Newman, Director


                      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 Quarterly Report of Birch Financial, Inc. (the
"Company") on Form 10-QSB for the period ending June 30, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Efraim Donitz, Chief Executive Officer, President and Treasurer of the
Company, 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.

     Dated: 8/8/02                          /s/ Efraim Donitz
           ------------                    -----------------------------
                                           Efraim Donitz, Chief Executive
                                           Officer, President and Treasurer