UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                           Form 10-KSB

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

    For the Fiscal Year Ended December 31, 2003

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

     For the Transition Period from __________ to

Commission File Number 333-86498


                       QUALITY EXCHANGE, INC.
                  --------------------------------
           (Name of small business issuer in its charter)

            Nevada                            41-2033500
       ---------------                     ----------------
(State or other jurisdiction of    (I.R.S. employer identification
incorporation or organization)                 number)

   East 49 Pineridge Ct #328                    99208
          Spokane, WA
 -----------------------------                 -------
(Address of principal executive               (Zip code)
           offices)

Issuer's telephone number: (509) 464-3072

Securities Registered Pursuant to Section 12(b) of the Act: NONE

      Title of each class           Name of each exchange on which
                                              registered

  ----------------------------------------------------------------

  ----------------------------------------------------------------


Securities Registered Pursuant to Section 12(g) of the Act:

                               COMMON
         ----------------------------------------------------
                          (Title of class)

         ----------------------------------------------------
                          (Title of class)






                                 -1-




Check  whether  the issuer (1) filed all reports required  to  be
filed by Section 13 or 15(d) of the Exchange Act during the  past
12  months  (or  for such shorter period that the registrant  was
required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.  [X] Yes [   ] No

Check  if there is no 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  registrant'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.  [   ]

The issuer's revenue for its most recent fiscal year was $0.

The  Company's  common  stock is listed on  the  Over-the-Counter
Bulletin  Board  under  the  stock  ticker  symbol  "QEXI."   The
aggregate market value of the voting and non-voting common equity
held by non-affiliates as of March 15, 2004 was $0.

The  number of shares outstanding of each of the issuer's classes
of common equity, as of December 31, 2003 was 2,250,000.

               DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly
describe  them  and identify the part of the Form  10-KSB  (e.g.,
Part  I,  Part II, etc.) into which the document is incorporated:
(1)  any  annual  report to security holders; (2)  any  proxy  or
information  statement; and (3) any prospectus filed pursuant  to
Rule  424(b)  or  (c) of the Securities Act of 1933  ("Securities
Act").   The  listed  documents should be clearly  described  for
identification purposes (e.g., annual report to security  holders
for fiscal year ended December 24, 1990).

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

PART I                                                                  3
 ITEM 1.  BUSINESS.                                                     3
 ITEM 2.  DESCRIPTION OF PROPERTY                                       7
 ITEM 3.  LEGAL PROCEEDINGS                                             7
 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS           7
PART II                                                                 8
 ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS      8
 ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION     9
 ITEM 7.  FINANCIAL STATEMENTS                                         11
 ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
 ACCOUNTING AND FINANCIAL DISCLOSURE                                   24
PART III                                                               24
 ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
 PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT            24
 ITEM 10.  EXECUTIVE COMPENSATION                                      25
 ITEM 11.  SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY
 HOLDERS                                                               25
 ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS              26
 ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K                            26
 ITEM 14.  CONTROLS AND PROCEDURES                                     27
SIGNATURES                                                             28







                                 -2-





                   FORWARD LOOKING STATEMENTS

     This Annual Report contains forward-looking statements about
our  business, financial condition and prospects that reflect our
management's   assumptions  and  beliefs  based  on   information
currently  available.   We  can  give  no  assurance   that   the
expectations indicated by such forward-looking statements will be
realized.   If any of our assumptions should prove incorrect,  or
if   any   of   the  risks  and  uncertainties  underlying   such
expectations  should materialize, Originally  New  York's  actual
results may differ materially from those indicated by the forward-
looking statements.

     The key factors that are not within our control and that may
have  a direct bearing on operating results include, but are  not
limited to, acceptance of our services, our ability to expand its
customer  base,  managements' ability to  raise  capital  in  the
future,  the  retention  of  key employees  and  changes  in  the
regulation of our industry.

     There  may  be other risks and circumstances that management
may  be unable to predict.  When used in this Report, words  such
as,  "believes,"  "expects," "intends,"  "plans,"  "anticipates,"
"estimates" and similar expressions are intended to identify  and
qualify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions.

                             PART I

ITEM 1.  BUSINESS.

Business Development

     We  were incorporated in the State of Nevada on June 3, 1998
under  the name Quality Exchange, Inc.  QEI, a development  stage
company,  through  our wholly owned subsidiary Orion  Publishing,
Inc.,  plans to provide an Internet-based vehicle for the  comic-
book  world  to  purchase and exchange collectible and  new-issue
comic  books.  Orion Publishing was incorporated in the State  of
Nevada  on  November 21, 2001.  Mr. Andrew D. Owens is  the  sole
Officer and Director of Orion Publishing, Inc.

     Our  administrative office is located at East  49  Pineridge
Ct. #328, Spokane, Washington 99208, telephone (509) 464-3072.

     QEI's fiscal year end is December 31.

Business of Issuer

     Principal Products and Services and Principal Markets

     QEI  plans  to build a vehicle for purchasing and exchanging
collectible   and  new-issue  comic  books  over  the   Internet.
Designed as an online auction, our website "www.Comicauction.biz"
will   be   available  24  hours  a  day,  seven  days  a   week.
www.Comicauction.biz  will  allow  transactions  in  business-to-
consumer,  consumer-to-consumer, and business-to-business  market
spaces.   We  will offer new comic books and vintage  collectible
comic     books.      To    complement    the    offerings     on
www.Comicauction.biz, QEI will offer its comics by mail order and
through retail establishments.

     QEI  strives to provide a venue of exchange that is credible
as  well as simple, safe, and exciting for those with an interest
in  purchasing,  collecting and trading comic books.   Using  the
Internet,  anyone around the world should be able to  access  our
website, browse for information, subscribe as a bidder or  seller
within  minutes,  and  buy,  sell, or  trade  comic  books.   The
registration at www.Comicauction.biz will be free of charge.   We
are  implementing a simple click-through sign-up  procedure  with
clear instructions allowing a quick and easy access to our secure
website.   Among the special features that we plan to build  into
our  website are (1) a functionality allowing the seller  to  set
the  low and capped prices of the comic book for sale, (2) secure
message   boards,  (3)  full  purchase  protection  with  secured
transactions, (4) tracking of purchases, (5) weekly updates,  and
(6) collection valuation services.

     Sellers using our website will benefit from low listing  and
transaction  fees; convenient, paper-free local and international
payments; and the ability to track the number of sales, payments,
and future buyer profiles.

     QEI will place a special emphasis on evaluating the feedback
from  customers.  Customers will be able to comment as  often  as
they  want  about their purchases and customer satisfaction.   We
will  implement  procedures allowing to process  input  from  the
feedback link on a continual basis - up to hundreds of times each
day.   That  should  allow us to begin working  on  solutions  to
reported problems almost immediately.





                                 -3-





     We  will  dedicate  a  concerted effort  to  protecting  the
identity of our service and ensuring the security of our website.
Relying  on the expertise of the website host (presently, Infinet
Internet  Services, Tempe, Arizona) QEI will implement procedures
for  authentication of clients, protection of integrity  of  live
online   auctions,   and  ensuring  the  secure   processing   of
transactions.

     Distribution Methods of the Products or Services

     In  our  sales  and marketing efforts QEI  will  employ  the
following  tools:  advertising in  trade  magazines;  an  on-line
brochure;  direct  mail;  a  periodic newsletter  distributed  to
registered  members; and a printed catalog of listed items.   QEI
also  believes that our reputation will play a large  role  as  a
promotional  tool.   Thus,  the word-of-mouth  advertising  among
comic  book shop owners and employees may become a cost-effective
and quick method of publicity for www.Comicauction.biz.

     QEI  plans  to  place  ads  in leading  comic-book  industry
publications such as Wizard Magazine, Previews, Comic Interviews,
Comic  Artist, SciFi Magazine, and Cinescape Magazine.   However,
at  present  time  no  specific advertising arrangements  are  in
place.

     QEI  has  registered  the domain name  www.Comicauction.biz.
QEI  intends  to develop www.Comicauction.biz into  a  recognized
brand-name.  QEI plans to associate www.Comicauction.biz with the
motto  "Driving  the comic book industry around  the  world"  and
project the image that www.Comicauction.biz is the vehicle on the
Internet  to  assist  any comic book enthusiast  in  finding  the
latest new and most valuable collectible comic books.  We plan to
develop alliances with leading websites involved with the  comic-
book  industry,  which  may  provide significant  cross-marketing
opportunities through link exchanges.

     QEI's  periodic newsletter to registered users  will  update
aficionados of special events and new products in the comic  book
industry.

     Industry background and competition

     Comic  books fall into a niche category of goods  possessing
two   prominent  attributes,  which  attract  buyers:   (1)   the
entertainment  value of reading comic books and (2)  the  fun  of
collecting them.  This combination of attributes is the basis for
active markets in both new and collectible comic books.

     To  the  best of QEI's knowledge, a new comic book typically
sells  between  $1.00  and $10.00 and the average  customer  buys
three  or  more  comic books per purchase.  A rare mint-condition
collectible  comic  book could fetch as  much  as  $350.00.   The
industry  employs  various  grading scales  (typically,  10-point
scales), which allow to estimate the market value of a particular
comic  book.  The actual trade prices may vary depending  on  the
marketplace,  region,  or transaction  type.   For  example,  the
auction format adopted by QEI may result in prices different from
a private sale.

     It is QEI's belief that the comic-book collectible market is
making  a shift away from traditional bookstore sales.  More  and
more buyers are using the Internet to research and complete their
purchases.  It has become an accepted practice to view  a  series
of  electronic images online instead of browsing through a  comic
book  at  a  store.  The ability to communicate  with  owners  of
desired  items via email and various secure payment options  make
it possible to complete transactions between counterparts located
in  different geographic regions.  This development in the  comic
book  marketplace allows collectors to take advantage of regional
discrepancies  in  supply and demand for  specific  character  or
category   comic  books,  including  limited  edition,  reissued,
reprinted, or other types of rare books.

     The   comic  book  industry  produces  a  number  of  widely
circulated  publications (such as the Wizard  Magazine)  covering
new and collectible comic book issues.




                                 -4-





     In  recent years, the online auction selected by QEI as  its
transaction  model has become a popular and successful  mechanism
for  trading  new, used, vintage and collectible  items.   Online
auctions  are  typically similar to live  auctions:  the  highest
bidder  takes the "prize" and regular participants try to succeed
in  the  bidding  game by implementing various  strategies.   The
element  of  competition involved in bidding is what  appeals  to
many online auction participants.

     QEI   believes  that  the  online  auction  model  overcomes
multiple  hurdles  that  impede the  growth  of  the  market  for
collectible  comic books.  Traditional exchange forums  are  less
efficient because of limitations imposed by geographical location
and  high  costs  of  bringing buyers  and  sellers  together  to
exchange information and to complete transactions.

     We  will  compete  against (1) offline comic-book  resellers
(including  wholesale distributors, liquidators,  retailers,  and
catalog and mail order companies), (2) online stores specializing
in  comic books (such as Comicbookresources.com), and (3) general
online auctions (including eBay, uBid and Yahoo!Auctions),  which
offer comic books among other items listed on their websites.

      Sources and availability of raw materials and the names  of
principal suppliers

     QEI  anticipates  that  new comic  books  will  be  supplied
directly  from publisher such as Image Comic's Top  Cow  studios,
Dark   Horse  Comics,  Marvel  Comics,  and  D.C.  Comics.    QEI
anticipates  that vintage collectible comics will be offered  and
supplied  by individual collectors and enthusiasts that  wish  to
have a central venue to trade.

     Customers

     QEI does not have an established client base.  At this time,
QEI   does   not  anticipate  that  our  business   will   depend
disproportionately  on  any  particular  client  or  a  group  of
clients.  Of this, however, there can be no assurance.

     QEI's  online  auction is seeking to appeal  to  buyers  and
sellers   in   customer-to-customer,  business-to-customer,   and
business to business market places.

     Demographically,   QEI   targets  primarily   middle   class
individuals between the ages of fifteen and thirty-five, who  are
interested in new or collectible comic books.  This target  group
is  already using the Internet heavily as a source of information
about  comic book values.  The goal is to convert someone looking
for information into a customer/buyer.

     An  important objective is to capture younger consumers  and
induce  them  to discover the website and remain its  users  over
many  years.   QEI  believes that comic  book  collectors  remain
faithful to their hobby well into adulthood, often passing  their
treasured collections down to future generations.

     QEI  strives to offer value- and time-conscious  shoppers  a
wide selection of comic books at reasonable prices via an easy-to-
use  online  interface.  QEI believes that, by providing  a  wide
range of comic book categories, www.Comicauction.biz will attract
an  avid collector as well as a novice.  A collector will come to
the  site  knowing exactly what she is searching for: a  specific
addition  to  her  collection.   A  novice  will  likely  make  a
spontaneous and immediate buying decision based on a  comic  book
appeal involving the topic or the character.

     Effect of Existing or Probable Government Regulations

     QEI  will  be subject to the same federal, state, and  local
laws  as  other  companies conducting business on  the  Internet.
Today there are relatively few laws specifically directed towards
online  services.  However, due to the increasing popularity  and
use  of  the Internet and online services, many laws relating  to
the  Internet  are being debated at the state and federal  levels
(both  in  the U.S. and abroad) and it is possible that laws  and
regulations  will  be adopted with respect  to  the  Internet  or
online  services.  These laws and regulations could cover  issues
such  as  user  privacy, freedom of expression,  pricing,  fraud,
content   and   quality  of  products  and  services,   taxation,
advertising,   intellectual  property  rights   and   information
security.



                                 -5-




     Applicability  to  the Internet of existing  laws  governing
issues   such  as  property  ownership,  copyrights   and   other
intellectual  property  issues, taxation,  libel,  obscenity  and
personal  privacy is uncertain.  The vast majority of these  laws
was  adopted  prior  to  the advent of the Internet  and  related
technologies and, as a result, do not contemplate or address  the
unique  issues  of the Internet and related technologies.   Those
laws  that  do  reference  the  Internet,  such  as  the  Digital
Millennium Copyright Act, are only beginning to be interpreted by
the  courts  and  their applicability and scope  are,  therefore,
uncertain.    In  addition,  numerous  states  have   regulations
regarding  how "auctions" may be conducted and the  liability  of
"auctioneers"  in conducting such auctions.  Several  states  are
considering imposing these regulations upon online auction sites,
which could harm our business.

     Several  states have proposed legislation that  would  limit
the  uses of personal user information gathered online or require
online services to establish privacy policies.  The Federal Trade
Commission  also  has settled several proceedings  regarding  the
manner, in which personal information is collected from users and
provided to third parties.  Specific statutes intended to protect
user  privacy  have  been passed in many non-U.S.  jurisdictions.
Changes  to existing laws or the passage of new laws intended  to
address  these  issues could directly affect  the  way  QEI  does
business or could create uncertainty on the Internet.  This could
reduce  demand  for  our services, increase  the  cost  of  doing
business  as  a  result of litigation costs or increased  service
delivery  costs, or otherwise harm QEI's business.  In  addition,
because our services will be accessible worldwide, and we plan to
facilitate   sales   of   goods  to  users   worldwide,   foreign
jurisdictions may claim that QEI is required to comply with their
laws.  Laws regulating Internet companies outside of the U.S. may
be  less favorable then those in the U.S., giving greater  rights
to  consumers, content owners and users.  Compliance may be  more
costly  or  may require QEI to change its business  practices  or
restrict  service offerings relative to those in the U.S.   QEI's
failure to comply with foreign laws could subject us to penalties
ranging from fines to bans on our ability to offer our services.

      Employees

     QEI  is  currently  in the development  stage.   During  the
development stage, QEI plans to rely exclusively on the  services
of  our  sole  officer  and  director  to  set  up  our  business
operations.  Currently, only Andrew D. Owens, President & CEO  is
involved in QEI business on a daily basis.

Reports to Security Holders

Annual Reports

     We  intend to deliver annual reports to security holders and
the  United States Securities and Exchange Commission on Form 10-
KSB  in  accordance  with the provisions of  Section  12  of  the
Securities Exchange Act of 1934, as amended.  Such annual reports
will include audited financial statements.

Periodic Reports with the SEC

     As  of  the  date of this annual report, we have  filed  all
necessary periodic reports with the SEC, as required by  law  and
regulations applicable to fully reporting companies.

Availability of Filings

     You may read and copy any materials we file with the SEC  at
the  SEC's  Public  Reference Room at  450  Fifth  Street,  N.W.,
Washington,  D.C.  20549.   You may  obtain  information  on  the
operation of the Public Reference Room by calling the SEC  at  1-
800-SEC-0330.   Additionally, the SEC maintains an Internet  site
(http://www.sec.gov) that contains reports, proxy and information
statements  and  other information regarding  issuers  that  file
electronically with the SEC.

Risk Factors

We  may  be unable to continue as a going concern if we  fail  to
generate  sufficient  revenues and/or fail to  obtain  additional
capital.

     We  have  limited funds and operations.  For the year  ended
December  31,  2003,  we have incurred a total  loss  of  $11,928
without generating any revenues.  We will not be profitable until
we are able to develop marketable products and derive substantial
revenues from sales of those products.  We expect to continue  to
lose money unless we are able to generate sufficient revenues and
cash  flows or obtain adequate funding through external offerings
of  our equity or debt.  There are no assurances that we will  be
able  to  generate  sales or that additional  financing  will  be
available,  or if available, will be on terms acceptable  to  us.
If  adequate working capital is not available, the value  of  our
Company's  common  shares will be negatively affected  and  could
result in the loss of your entire investment.




                                 -6-





We may not be able to compete against our larger competitors.

     Significantly all of our competitors have greater financial,
distribution,  marketing and other resources  and  have  achieved
greater  recognition for their brand names for product  lines  or
certain  products  than  we have.  As a  result,  some  of  these
competitors may be able to devote greater resources to  marketing
and  promotional  activities  or adopt  more  aggressive  pricing
policies than we may be able to.  Increased competition  in  this
manner  may result in reduced operating margins or loss of market
share.

Our business could suffer if we fail to attract, train and retain
skilled employees

     The availability of highly trained and skilled professional,
administrative and technical personnel is critical to our  future
growth and profitability.  Competition for scientists, engineers,
technicians, management and professional personnel is intense and
competitors  aggressively  recruit  key  employees.   Because  of
competition  for  experienced personnel, particularly  in  highly
specialized  areas, it will be difficult to meet our  anticipated
needs  for  these  employees in a timely manner.   We  intend  to
devote   significant  resources  to  recruit,  train  and  retain
qualified employees; however, we cannot assure you that  we  will
be able to attract and retain such employees on acceptable terms.
Any  failure to do so could have a material adverse effect on our
operations.

Our  management is involved with other business activities, which
could reduce the time they allocate to our operations.

     Our  operations  depend  substantially  on  the  skills  and
experience of Mr. Andrew D. Owens, our President.  Mr.  Owens  is
involved  in  other business activities and may, in  the  future,
become  involved in other business opportunities.  If a  specific
business  opportunity becomes available, one  or  more  of  these
individuals may face a conflict in selecting between our  company
and  his  other  business interests.  We have  not  formulated  a
policy for the resolution of such conflicts.

Certain  Nevada  corporation  law  provisions  could  prevent   a
potential takeover, which could adversely affect the market price
of our common stock.

     We  are  incorporated  in  the  State  of  Nevada.   Certain
provisions  of Nevada corporation law could adversely affect  the
market price of our common stock.  Because Nevada corporation law
requires  board approval of a transaction involving a  change  in
our  control, it would be more difficult for someone  to  acquire
control  of  us.   Nevada  corporate law also  discourages  proxy
contests  making it more difficult for you and other shareholders
to  elect  directors  other  than  the  candidate  or  candidates
nominated   by   our  board  of  directors.   Our   articles   of
incorporation and by-laws contain no similar provisions.

ITEM 2.  DESCRIPTION OF PROPERTY

Description of Property

     QEI  uses  the  administrative office  located  at  East  49
Pineridge  Ct  #328, Spokane, Washington 99208.  A  director  and
shareholder is providing the office space at no charge to QEI.

Investment Policies

     Our  management  does not currently have policies  regarding
the  acquisition  or  sale of real estate  assets  primarily  for
possible  capital  gain  or primarily  for  income.   We  do  not
presently  hold  any  investments or interests  in  real  estate,
investments  in  real  estate  mortgages  or  securities  of   or
interests in persons primarily engaged in real estate activities.

ITEM 3.  LEGAL PROCEEDINGS

     We  are not currently involved in any legal proceedings  nor
do we have knowledge of any threatened litigation.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     We did not hold a shareholders meeting in 2003, thus there
was no vote of securities holders in 2003.




                                 -7-




                             PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market information

     Our common stock is currently traded on the Over-the-Counter
Bulletin Board under the stock ticker symbol "QEXI."  As  of  the
date of this report, trading in our stock has not yet developed.

     As of the date of this report,

  1.   There are no outstanding options or warrants to purchase, or
       other instruments convertible into, common equity of QEI;
  2.   The 2,000,000 shares of Common Stock held by Andrew D. Owens
       are eligible for sale pursuant to and subject to the quantitative
       limitations of Rule 144 under the Securities Act; and
  3.   There is no stock that has been proposed to be publicly
       offered resulting in dilution to current shareholders.

Holders

     As  of  the  date  of  this report,  we  have  approximately
2,250,000  shares  of $0.001 par value common  stock  issued  and
outstanding held by approximately 21 shareholders of record.  Our
Transfer Agent is Executive Registrar & Transfer Agency, 3118  W.
Thomas Road, Suite 707, Phoenix, AZ 85017, phone (602) 415-1273.

Dividends

     We  have  never declared or paid any cash dividends  on  our
common  stock.  For the foreseeable future, we intend  to  retain
any  earnings  to  finance the development and expansion  of  our
business,  and we do not anticipate paying any cash dividends  on
its common stock.  Any future determination to pay dividends will
be  at  the  discretion  of the Board of Directors  and  will  be
dependent  upon then existing conditions, including our financial
condition   and  results  of  operations,  capital  requirements,
contractual  restrictions, business prospects, and other  factors
that the board of directors considers relevant.

Securities  Authorized  for  Issuance Under  Equity  Compensation
Plans

     The following table provides the following information as of
December  31,  2003,  for  equity compensation  plans  previously
approved  by  security holders, as well as those  not  previously
approved by security holders:

  1.   The number of securities to be issued upon the exercise of
       outstanding options, warrants and rights;
  2.   The weighted-average exercise price of the outstanding
       options, warrants and rights; and
  3.   Other than securities to be issued upon the exercise of the
       outstanding  options, warrants and rights, the  number  of
       securities remaining available for future issuance under the
       plan.

                              Number of     Weighted    Number of
                              Securities    average     securities
                                to be       exercise    remaining
                             issued upon    price of    available
                             exercise of  outstanding   for future
                             outstanding    options,     issuance
                               options,     warrants
                               warrants    and rights
   Plan Category              and rights
----------------------------------------------------------------------
                                 (a)          (b)          (c)
Equity compensation plans         -            -            -
approved by security
holders

Equity compensation plans         -            -            -
not approved by security
holders

Total                             -            -            -






                                 -8-





Recent Registered Offering

     The SB-2 Registration Statement, as amended (SEC File Number
333-86498),  filed by QEI and deemed effective by the  Securities
Exchange  Commission as of November 29, 2002, offered  a  minimum
of  200,000  and a maximum of 2,000,000 shares of  the  Company's
$0.001  par  value  common stock at a price of  $0.10  per  share
pursuant  to  a self-underwritten offering.  As of  February  27,
2003,  a  total  of 250,000 shares were sold by  the  Company  to
approximately twenty investors in conjunction with the registered
offering  for an aggregate of $25,000.00.  On February 27,  2003,
we  closed  the  offering and subsequently filed a Post-Effective
Amendment to deregister 1,750,000 shares representing the  unsold
portion of the stock offered by QEI.

     During the year ended December 31, 2003, the actual uses  of
the proceeds from the offering were as follows:

                    Item                      Amount
       ----------------------------------------------------

          Offering Expenses:
            Escrow  & Transfer Agent          $555.00
            Miscellaneous fees                $200.00
          Operating Expenses:
            Computer Hardware & Software    $1,472.42
            Website                         $1,250.00
          Development & Maintenance
            Office Supplies                   $114.34
            General Working Capital:
              Accounting                    $3,800.00
              Other                         $5,543.25
       ----------------------------------------------------
          Total                            $12,935.01
       ====================================================

     None  of  the  uses described above were direct or  indirect
payments  to our directors, officers, general partners  or  their
associates;  to persons owning 10% or more of any  class  of  our
equity securities; or to our affiliates.

     The  actual uses of proceeds described above were consistent
with the anticipated uses of proceeds described in the Prospectus
for  the offering with one exception: we had to allocate a larger
portion  of the net proceeds from the offering to general working
capital, primarily because of a substantial increase in the  cost
of complying with federal securities regulations.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION

Forward Looking Statements

     Some  of  the statements contained in this Form 10-KSB  that
are  not historical facts are "forward-looking statements"  which
can  be identified by the use of terminology such as "estimates,"
"projects,"   "plans,"   "believes,"  "expects,"   "anticipates,"
"intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties.  We urge you to
be   cautious  of  the  forward-looking  statements,  that   such
statements, which are contained in this Form 10-KSB, reflect  our
current  beliefs with respect to future events and involve  known
and  unknown risks, uncertainties and other factors affecting our
operations,  market growth, services, products and licenses.   No
assurances  can  be  given regarding the  achievement  of  future
results,  as actual results may differ materially as a result  of
the  risks  we  face,  and  actual events  may  differ  from  the
assumptions  underlying  the  statements  that  have  been   made
regarding  anticipated  events.  Factors that  may  cause  actual
results, our performance or achievements, or industry results, to
differ materially from those contemplated by such forward-looking
statements include without limitation:

     1.   Our ability to maintain, attract and integrate internal
          management, technical information and management information
          systems;

     2.   Our ability to generate customer demand for our products;

     3.   The intensity of competition; and

     4.   General economic conditions.





                                 -9-




     All  written  and  oral forward-looking statements  made  in
connection with this Form 10-KSB that are attributable to  us  or
persons  acting  on our behalf are expressly qualified  in  their
entirety by these cautionary statements.  Given the uncertainties
that  surround such statements, you are cautioned  not  to  place
undue reliance on such forward-looking statements.

Management's Discussion

     QEI was incorporated in the State of Nevada on June 3, 1998.
QEI  is a startup and has not yet realized any revenues.  QEI had
not  begun  actively  pursuing  our  business  plan  until  Orion
Publishing, Inc., a wholly owned subsidiary, was incorporated  in
the State of Nevada on November 21, 2001.  To date, QEI has:

     1.    Recruited and retained a management team and board  of
           directors;
     2.    Developed a business plan; and
     3.    Launched the pilot version of our website, www.comicauction.biz.

     Since our inception on June 3, 1998 to December 31, 2003, we
generated  no revenues while incurring $22,623 in total expenses.
This  resulted  in a cumulative net loss of $22,623  during  that
period,  which was equivalent to $0.01 per share.  The cumulative
net  loss  was  attributable solely  to  the  costs  of  start-up
operations.

     With  continuing losses and no sales to date, the future  of
we  are  dependent upon our ability to obtain financing and  upon
future profitable operations from the development of our business
opportunities.   On  the  basis of these facts,  our  independent
auditors expressed doubt about our ability to continue as a going
concern.

     As  of  February  27, 2003, we completed a  public  offering
registered via Form SB-2 and issued a total of 250,000 shares  of
its  $0.001  par  value  common stock in  exchange  for  cash  of
$25,000.

Plan of Operation

     We  expect  that  we  will sell new-issue  comic  books  for
between $1.50 to $10.00.  Vintage comic books may range in  price
from  $0.10  to  $350.00 per item.  QEI plans to derive  revenues
from  listing and transaction fees.  QEI expects to charge a  fee
of  2%  of the amount of transaction, which we will collect  from
buyers  and  sellers (1% from the buyer and 1% from  the  seller)
after each auction is completed.

     Our goal is to maintain an innovative attractive web auction
that  appeals  to  buyers  and sellers  in  customer-to-customer,
business-to-customer and business-to -business market places.  We
are  striving to accomplish the following during the next  twelve
to eighteen months:

     1.   Establish a paying subscriber/member base and benefit from
          repeat traffic to the website;
     2.   Develop strategic alliances with popular web auction sites;
     3.   Promote www.Comicauction.biz with leading Internet search
          engines so that they place www.Comicauction.biz at the top of
          searches when it comes to researching and purchasing comic books;
     4.   Develop distribution channels beyond the website to improve
          revenues.

     QEI's website www.comicauction.biz is operational and allows
visitors  to bid and place orders online.  The initial  goal  for
the  website  -  in addition to its functionality  as  an  online
auction  site  - is to build brand recognition via  an  effective
Internet  promotional campaign.  Presently,  we  are  researching
promotional  mailing companies, advertising and public  relations
firms that might help us in the process.

     At  present  time, QEI estimates that in order  to  commence
planned operations we need to (a) complete the set up and  design
of  the  website  and  (b)  purchase office  furniture,  computer
hardware, software and supplies.

     QEI  believes  that  the  proceeds of  the  public  offering
completed  in  February 2003 will be sufficient  to  satisfy  the
start-up  and  operating  requirements for  the  next  twelve  to
eighteen  months.  "Start-up and operating requirements"  involve
having   our  website  totally  operational  and  developed   for
$4,500.00 or less in the next 12 to 18 months.  QEI will use  the
company  computer  for  accounting and  order  fulfillment.   Our
marketing budget of $500.00 will limit our ability to execute the
entire  business  plan,  but  we  believe  that  the  amount   is
sufficient to get listed on  one mid-level search engine.






                                 -10-





     QEI  expects to generate revenue in the first four weeks  of
operation  from  the date the first funds are received  from  the
public  offering escrow.  QEI believes that using  a  minimum  of
$4,500  for web development will be satisfactory to get and  keep
the  site totally operational for the next 12 to 18 months.   The
site  will  be  fully functional but, with a  limited  budget  of
$4,500, the graphic appearance, depth of the web pages and  comic
book  description will be brief.  Any advanced technical features
of  the website (such as online video streaming capabilities) and
widespread   marketing  efforts  (such  as  promotional   mailing
campaigns,  engagement of public relations firms,  purchasing  of
website banner ads) will be postponed until after several  months
of  operation and, as QEI anticipates, will be funded  from  cash
flow.   QEI  inventory  will be kept  at  a  minimum  (less  than
$500.00).   But because of Mr. Owens experience and knowledge  in
the  industry  QEI feels we will still be able to  sell  our  own
products  via  our website.  Because these items will  be  funded
from cash flow, the growth of QEI will be minimal and it could be
difficult for us to expand and grow.

     QEI  is striving to accomplish the following during the next
twelve to eighteen months:

  1.   Establish a subscriber/member base and benefit from repeat
       traffic to the website; the subscriber base will be in the form
       of a "comic book of the month club" for a set price and have a
       surprise comic book sent at the first of every month or a monthly
       news letter that reviews the newest published titles.
  2.   Promote www.comicauction.biz with leading Internet search
       engines so that they place www.comicauction.biz at the top of
       searches when it comes to researching and purchasing comic books;
       in particular, QEI expects to use initially and expects be at the
       top of searches in www.overture.com, which currently lists
       ebay.com at the top of searches for a "Comic Books" at estimated
       41 cents a hit.  All QEI has to do is pay 41 cents a hit to be at
       the top.  It will be virtually impossible to be at the top of
       every search engine.  If QEI can maintain a presence in the top
       three of at least three or four of top search engines.
  3.   Develop distribution channels beyond the website to improve
       revenues.

     QEI  anticipates that over the next 12 months QEI  will  not
hire any additional full- or part-time employees, as the services
provided  by the officers and directors of QEI appear  sufficient
during the initial growth stage.  Sales growth in the next six to
12 months is important for the QEI' plan of operations.  However,
we  cannot guarantee that we will generate such growth.  If we do
not  generate  sufficient cash flow to support its operations  in
the next 12 to 18 months, we may need to raise additional capital
by  issuing  capital  stock in exchange  for  cash  in  order  to
continue  as a going concern.  However, there can be no assurance
that  we  would  be  able  to raise enough  capital  to  stay  in
business.

ITEM 7.  FINANCIAL STATEMENTS

     The following documents (pages F-1 to F-8) form part of the
report on the Financial Statements

                                                          PAGE

Independent Auditors' Report                              F-1
Consolidated Balance Sheets                               F-2
Consolidated Statements of Operations                     F-3
Consolidated Statement of Stockholders' Equity            F-4
(Deficit)
Consolidated Statements of Cash Flows                     F-5
Footnotes                                                 F-6






                                 -11-










              Quality Exchange, Inc. and Subsidiary
                  (A Development Stage Company)

                   Consolidated Balance Sheets
                              as of
                   December 31, 2003 and 2002

                               and

             Consolidated Statements of Operations,
               Stockholders' Equity (Deficit), and
                           Cash Flows
                       for the years ended
                   December 31, 2003 and 2002,
                      and for the period of
                June 3, 1998 (Date of Inception)
                             through
                        December 31, 2003


























                                 -12-






                        TABLE OF CONTENTS




                                                           PAGE

Independent Auditors' Report                                1

Consolidated Balance Sheets                                 2

Consolidated Statements of Operations                       3

Consolidated Statement of Changes in Stockholders' Equity   4
(Deficit)

Consolidated  Statements of Cash Flows                      5

Footnotes                                                   6

























                                 -13-





Beckstead and Watts, LLP
Certified Public Accountants
                                          3340 Wynn Road, Suite B
                                              Las Vegas, NV 89102
                                                     702.257.1984
                                               702.362.0540 (fax)

                  INDEPENDENT AUDITORS' REPORT


Board of Directors
Quality Exchange, Inc. and Subsidiary

We  have  audited  the  Consolidated Balance  Sheets  of  Quality
Exchange,  Inc. and its subsidiary (the "Company") (A Development
Stage Company), as of December 31, 2003 and 2002, and the related
Consolidated Statements of Operations, Stockholders' Equity,  and
Cash  Flows for the years then ended and for the period  June  3,
1998   (Date   of  Inception)  to  December  31,   2003.    These
consolidated 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  generally  accepted
auditing  standards  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  statement presentation.  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 consolidated financial statements referred to
above  present  fairly, in all material respects,  the  financial
position  of  Quality  Exchange,  Inc.  and  its  subsidiary   (A
Development Stage Company) as of December 31, 2003 and 2002,  and
the  results of its operations and cash flows for the years  then
ended  and  for  the period June 3, 1998 (Date of  Inception)  to
December   31,  2003,  in  conformity  with  generally   accepted
accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming
the  Company  will continue as a going concern.  As discussed  in
Note  3  to the financial statements, the Company has had limited
operations  and have not commenced planned principal  operations.
This raises substantial doubt about its ability to continue as  a
going  concern.  Management's plan in regard to these matters  is
also  described  in  Note  3.  The financial  statements  do  not
include  any  adjustments that might result from the  outcome  of
this uncertainty.

/s/ Beckstead and Watts, LLP
----------------------------
March 4, 2004





                                 -14-          F-1










              Quality Exchange, Inc. and Subsidiary
                  (A Development Stage Company)
                   Consolidated Balance Sheets


                                                               December 31,
                                                              2003     2002
                                                           -------------------

Assets

Current assets:
 Cash                                                       $12,374     $245
                                                           -------------------
  Total current assets                                       12,374      245
                                                           -------------------

Fixed assets, net                                             1,043        -

                                                           -------------------
                                                            $13,417     $245
                                                           ===================
Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
 Due to shareholder                                          $9,040   $8,940
                                                           -------------------
  Total current liabilities                                   9,040    8,940
                                                           -------------------
Stockholders' equity (deficit):
 Common stock, $0.001 par value, 25,000,000 shares
  authorized, 2,250,000 and 2,000,000 shares issued and
  outstanding as of 12/31/03 and 12/31/02, respectively       2,250    2,000
Additional paid in capital                                   24,750        -
(Deficit) accumulated during development stage              (22,623) (10,695)
                                                           -------------------
                                                              4,377   (8,695)
                                                           -------------------

                                                            $13,417     $245
                                                           ===================




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





                                 -15-          F-2





              Quality Exchange, Inc. and Subsidiary
                  (A Development Stage Company)
              Consolidated Statements of Operations

                                                         June 3, 1998
                                   For the years ended  (Inception) to
                                        December 31,     December 31,
                                      2003       2002        2003
                                   ------------------------------------

Revenue                                  $-         $-          $-
                                   ------------------------------------
Expenses:
 General & administrative expenses   11,744     10,420      22,439
 Depreciation                           184          -         184
                                   ------------------------------------
  Total expenses                     11,928     10,420      22,623
                                   ------------------------------------

Net (loss)                         $(11,928)  $(10,420)   $(22,623)
                                   ====================================
Weighted average number of
 common shares outstanding -
 basic and fully diluted          2,210,959  2,000,000
                                   ======================
Net (loss) per share -
basic and fully diluted              $(0.01)    $(0.01)
                                   ======================





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







                                 -16-          F-3






            Quality Exchange, Inc. and Subsidiary
                (A Development Stage Company)
  Consolidated Statement of Changes in Stockholders' Equity
                          (Deficit)

<TABLE>
<CAPTION>
                                                                              (Deficit)
                                                                             Accumulated        Total
                                                  Additional                    During      Stockholders'
                              Common Stock         Paid-in     Subscriptions  Development      Equity
                           Shares      Amount      Capital     (Receivable)      Stage        (Deficit)
                        -----------------------------------------------------------------------------------
<S>                            <C>         <C>          <C>         <C>           <C>            <C>

June 1998
  Founder shares           2,000,000     $2,000            $-     $(2,000)           $-            $-

Net (loss)
  June 3, 1998
  (Inception) to
  December 31, 1998                                                                   -             -
                        -----------------------------------------------------------------------------------

Balance, December 31,      2,000,000      2,000             -      (2,000)            -             -
1998

Net (loss)
  For the year ended
  December 31, 1999                                                                   -             -
                        -----------------------------------------------------------------------------------

Balance, December 31,      2,000,000      2,000             -      (2,000)            -             -
1999

Net (loss)
  For the year ended
  December 31, 2000                                                                   -             -
                        -----------------------------------------------------------------------------------

Balance, December 31,      2,000,000      2,000             -      (2,000)            -             -
2000

Net (loss)
  For the year ended
  December 31, 2001                                                               (275)         (275)
                        -----------------------------------------------------------------------------------

Balance, December 31,      2,000,000      2,000             -      (2,000)        (275)         (275)
2001

March 2002
  Expensed paid by a
  founder to cancel
  subscriptions                                                      2,000                      2,000
receivable

Net (loss)
  For the year ended
  December 31, 2002                                                            (10,420)      (10,420)
                        -----------------------------------------------------------------------------------

Balance, December 31,      2,000,000      2,000             -                  (10,695)       (8,695)
2002

February 2003
  Issued for cash            250,000        250        24,750                                  25,000

Net (loss)
  For the year ended
  December 31, 2003                                                            (11,928)      (11,928)
                        -----------------------------------------------------------------------------------

Balance, December 31,      2,250,000     $2,250       $24,750           $-    $(22,623)        $4,377
2003                    ===================================================================================


</TABLE>

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






                                 -17-          F-4






            Quality Exchange, Inc. and Subsidiary
                (A Development Stage Company)
            Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                 June 3, 1998
                                                       For the years ended      (Inception) to
                                                            December 31,          December 31,
                                                        2003          2002           2003
                                                    -------------------------------------------
<S>                                                     <C>           <C>             <C>

Cash flows from operating activities
Net (loss)                                           $(11,928)     $(10,420)       $(22,623)
Depreciation                                               184             -             184
                                                    -------------------------------------------
Net cash (used) by operating activities               (11,744)      (10,420)        (22,439)
                                                    -------------------------------------------

Cash flows from investing activities
  Purchase of fixed assets                             (1,227)             -         (1,227)
                                                    -------------------------------------------
Net cash (used) by investing activities                (1,227)             -         (1,227)
                                                    -------------------------------------------

Cash flows from financing activities
  Issuances of common stock                             25,000         2,000          27,000
  Increase in due to shareholder                           100         8,665           9,040
                                                    -------------------------------------------
Net cash provided by financing activities               25,100        10,665          36,040
                                                    -------------------------------------------

Net increase in cash                                    12,129           245          12,374
Cash - beginning                                           245             -               -
                                                    -------------------------------------------
Cash - ending                                          $12,374            $-         $12,274
                                                    ===========================================
Supplemental disclosures:
  Interest paid                                             $-            $-              $-
                                                    ===========================================
  Income taxes paid                                         $-            $-              $-
                                                    ===========================================

Non-cash transactions:
  Shares issued for expenses paid for by a                  $-        $2,000          $2,000
founder                                             ===========================================

  Number of shares issued for expenses paid for              -     2,000,000       2,000,000
by a founder                                        ===========================================


</TABLE>



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





                                 -18-          F-5





              Quality Exchange, Inc. and Subsidiary
                  (A Development Stage Company)
                              Notes

Note 1 - History and organization of the company

The  Company was organized June 3, 1998 (Date of Inception) under
the  laws of the State of Nevada, as Quality Exchange, Inc.   The
Company  has  no operations and in accordance with SFAS  #7,  the
Company  is considered a development stage company.  The  Company
is  authorized  to  issue 25,000,000 shares of $0.001  par  value
common stock.

The  Company  has  a  wholly owned subsidiary, Orion  Publishing,
Inc.,  whose  plan  of  operation is  to  purchase  and  exchange
collectible and new issue comic books via an online auction.

Note 2 - Accounting policies and procedures

Cash and cash equivalents
The  Company  maintains a cash balance in a  non-interest-bearing
account  that currently does not exceed federally insured limits.
For  the  purpose  of the statements of cash  flows,  all  highly
liquid  investments with an original maturity of three months  or
less  are considered to be cash equivalents.  There were no  cash
equivalents as of December 31, 2003 and 2002.

Impairment of long-lived assets
Long-lived  assets held and used by the Company are reviewed  for
possible impairment whenever events or circumstances indicate the
carrying  amount  of  an  asset may  not  be  recoverable  or  is
impaired.  No such impairments have been identified by management
at December 31, 2003 and 2002.

Fixed Assets
Property  and equipment are recorded at historical  cost.   Minor
additions and renewals are expensed in the year incurred.   Major
additions and renewals are capitalized and depreciated over their
estimated  useful  lives.  Depreciation is calculated  using  the
straight-line method over the estimated useful lives as follows:

               Computer equipment          5 years

Revenue recognition
The  Company  reports revenue as invoiced on  an  accrued  basis.
Costs  of  sales are recorded as items are sold and are comprised
of product purchases and shipping costs.

Advertising costs
The Company expenses all costs of advertising as incurred.  There
were  no  advertising  costs included  in  selling,  general  and
administrative expenses in 2003 or 2002.

Loss per share
Net  loss  per share is provided in accordance with Statement  of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings  Per
Share".   Basic  loss  per share is computed by  dividing  losses
available  to common stockholders by the weighted average  number
of  common shares outstanding during the period.  The Company had
no  dilutive common stock equivalents, such as stock  options  or
warrants as of December 31, 2003 or 2002.

Reporting on the costs of start-up activities
Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of
Start-Up  Activities," which provides guidance on  the  financial
reporting  of  start-up costs and organizational costs,  requires
most costs of start-up activities and organizational costs to  be
expensed  as  incurred.  SOP 98-5 is effective for  fiscal  years
beginning after December 15, 1998.  With the adoption of SOP  98-
5,  there has been little or no effect on the Company's financial
statements.




                                 -19-          F-6




              Quality Exchange, Inc. and Subsidiary
                  (A Development Stage Company)
                              Notes

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

Fair value of financial instruments
Fair  value  estimates discussed herein are  based  upon  certain
market   assumptions  and  pertinent  information  available   to
management  as  of  December 31, 2003 and 2002.   The  respective
carrying  value of certain on-balance-sheet financial instruments
approximated  their  fair  values.  These  financial  instruments
include  cash and accounts payable. Fair values were  assumed  to
approximate  carrying values for cash and payables  because  they
are  short  term in nature and their carrying amounts approximate
fair values or they are payable on demand.

Income Taxes
Deferred  income tax assets and liabilities are computed annually
for differences between the financial statement and tax basis  of
assets  and liabilities that will result in taxable or deductible
amounts  in  the  future  based on enacted  tax  laws  and  rates
applicable  on the periods in which the differences are  expected
to  affect  taxable income.  Valuation allowances are established
when  necessary  to  reduce deferred tax  assets  to  the  amount
expected  to be realized.  Income tax expense is the tax  payable
or  refundable for the period plus or minus the change during the
period in deferred tax assets and liabilities.

Segment reporting
The  Company follows Statement of Financial Accounting  Standards
No. 130, "Disclosures About Segments of an Enterprise and Related
Information". The Company operates as a single segment  and  will
evaluate additional segment disclosure requirements as it expands
its operations.

Dividends
The  Company has not yet adopted any policy regarding payment  of
dividends.   No  dividends  have  been  paid  or  declared  since
inception.

Recent pronouncements
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated  with  Exit or Disposal Activities",  which  addresses
financial accounting and reporting for costs associated with exit
or  disposal activities and supersedes EITF No. 94-3,  "Liability
Recognition for Certain Employee Termination Benefits  and  Other
Costs to Exit an Activity (including Certain Costs Incurred in  a
Restructuring)."  SFAS No. 146 requires that a  liability  for  a
cost  associated with an exit or disposal activity be  recognized
when  the liability is incurred. Under EITF No. 94-3, a liability
for  an  exit  cost  was recognized at the date  of  an  entity's
commitment  to  an exit plan. SFAS No. 146 also establishes  that
the  liability should initially be measured and recorded at  fair
value. The provisions of SFAS No. 146 will be adopted for exit or
disposal activities that are initiated after December 31, 2002.

In  December 2002, the FASB issued SFAS No. 148, "Accounting  for
Stock-Based  Compensation-Transition and Disclosure-an  amendment
of SFAS No. 123." This Statement amends SFAS No. 123, "Accounting
for Stock-Based Compensation", to provide alternative methods  of
transition for a voluntary change to the fair value based  method
of accounting for stock-based employee compensation. In addition,
this statement amends the disclosure requirements of SFAS No. 123
to  require  prominent  disclosures in both  annual  and  interim
financial  statements about the method of accounting  for  stock-
based employee compensation and the effect of the method used  on
reported results. The adoption of SFAS No. 148 is not expected to
have  a  material impact on the company's financial  position  or
results of operations.





                                 -20-          F-7





              Quality Exchange, Inc. and Subsidiary
                  (A Development Stage Company)
                              Notes

In November 2002, the FASB issued FASB Interpretation ("FIN") No.
45,   "Guarantors  Accounting  and  Disclosure  Requirements  for
Guarantees,  Including Indirect Guarantees  and  Indebtedness  of
Others",  an  interpretation  of FIN  No.  5,  57  and  107,  and
rescission  of FIN No. 34, "Disclosure of Indirect Guarantees  of
Indebtedness of Others". FIN 45 elaborates on the disclosures  to
be  made  by  the  guarantor in its interim and annual  financial
statements about its obligations under certain guarantees that it
has  issued. It also requires that a guarantor recognize, at  the
inception of a guarantee, a liability for the fair value  of  the
obligation  undertaken  in  issuing the  guarantee.  The  initial
recognition and measurement provisions of this interpretation are
applicable  on  a  prospective  basis  to  guarantees  issued  or
modified  after December 31, 2002; while, the provisions  of  the
disclosure requirements are effective for financial statements of
interim  or  annual periods ending after December 15,  2002.  The
company  believes  that the adoption of such interpretation  will
not  have a material impact on its financial position or  results
of  operations  and will adopt such interpretation during  fiscal
year 2003, as required.

In  January  2003, the FASB issued FIN No. 46, "Consolidation  of
Variable  Interest  Entities",  an interpretation  of  Accounting
Research  Bulletin  No.  51. FIN No. 46  requires  that  variable
interest entities be consolidated by a company if that company is
subject  to  a  majority of the risk of loss  from  the  variable
interest entity's activities or is entitled to receive a majority
of  the  entity's  residual returns or  both.  FIN  No.  46  also
requires  disclosures  about  variable  interest  entities   that
companies are not required to consolidate but in which a  company
has   a   significant   variable  interest.   The   consolidation
requirements  of  FIN No. 46 will apply immediately  to  variable
interest   entities   created  after  January   31,   2003.   The
consolidation  requirements will apply  to  entities  established
prior  to  January 31, 2003 in the first fiscal year  or  interim
period beginning after June 15, 2003. The disclosure requirements
will  apply in all financial statements issued after January  31,
2003.  The company will begin to adopt the provisions of FIN  No.
46 during the first quarter of fiscal 2003.

In  May  2003,  the  FASB issued SFAS No.  150,  "Accounting  for
Certain  Financial  Instruments  with  Characteristics  of   Both
Liabilities  and Equity." SFAS No. 150 changes the classification
in   the  statement  of  financial  position  of  certain  common
financial   instruments   from   either   equity   or   mezzanine
presentation  to  liabilities and requires  an  issuer  of  those
financial  statements  to  recognize changes  in  fair  value  or
redemption  amount, as applicable, in earnings. SFAS No.  150  is
effective  for  financial instruments entered  into  or  modified
after  May 31, 2003, and with one exception, is effective at  the
beginning  of the first interim period beginning after  June  15,
2003. The effect of adopting SFAS No. 150 will be recognized as a
cumulative effect of an accounting change as of the beginning  of
the  period  of  adoption. Restatement of prior  periods  is  not
permitted. SFAS No. 150 did not have any impact on the  Company's
financial position or results of operations.

Stock-Based Compensation
The  Company  accounts  for stock-based awards  to  employees  in
accordance  with  Accounting Principles  Board  Opinion  No.  25,
"Accounting   for   Stock  Issued  to  Employees"   and   related
interpretations  and has adopted the disclosure-only  alternative
of SFAS No. 123, "Accounting for Stock-Based Compensation."
Options  granted to consultants, independent representatives  and
other non-employees are accounted for using the fair value method
as prescribed by SFAS No. 123.

Year end
The Company has adopted December 31 as its fiscal year end.






                                 -21-          F-8




              Quality Exchange, Inc. and Subsidiary
                  (A Development Stage Company)
                              Notes

Note 3 - Going concern

The accompanying financial statements have been prepared assuming
the  Company will continue as a going concern.  As shown  in  the
accompanying financial statements, the Company has incurred a net
loss  of $22,623 for the period from June 3, 1998 (inception)  to
December  31, 2003, and has no sales.  The future of the  Company
is dependent upon its ability to obtain financing and upon future
profitable  operations from the development of its  new  business
opportunities.  Management raised additional capital  through  an
offering  of  common stock registered on Form SB-2  and  believes
that  the Company has enough capital for operations for a  period
of  twelve  months.  The financial statements do not include  any
adjustments relating to the recoverability and classification  of
recorded  assets,  or  the  amounts  of  and  classification   of
liabilities  that  might be necessary in the  event  the  Company
cannot continue in existence.

Note 4 - Income taxes

The  Company  accounts  for  income  taxes  under  Statement   of
Financial  Accounting Standards No. 109, "Accounting  for  Income
Taxes"  ("SFAS  No. 109"), which requires use  of  the  liability
method.    SFAS  No.  109 provides that deferred tax  assets  and
liabilities are recorded based on the differences between the tax
bases  of  assets and liabilities and their carrying amounts  for
financial   reporting   purposes,  referred   to   as   temporary
differences.  Deferred tax assets and liabilities at the  end  of
each  period are determined using the currently enacted tax rates
applied  to  taxable income in the periods in which the  deferred
tax  assets  and  liabilities  are  expected  to  be  settled  or
realized.

The  provision for income taxes differs from the amount  computed
by  applying  the  statutory federal income tax  rate  to  income
before  provision for income taxes.  The sources and tax  effects
of the differences are as follows:


                      U.S federal statutory rate      (34.0%)

                      Valuation reserve                34.0%
                                                   -------------
                      Total                               -%
                                                   =============

As of December 31, 2003, the Company has a net operating loss
carry forward as follows:

   Year         Amount       Expiration
  --------------------------------------
   2001        $     275        2021
   2002        $  10,420        2022
   2003        $  11,928        2023


Note 5 - Fixed assets

During  the  year  ended December 31, 2003, the Company  acquired
computer  equipment totaling $1,227.  For the year ended December
31, 2003, the amount of depreciation expense was $184.

Note 6 - Stockholders' equity

The  Company  is  authorized to issue 25,000,000  shares  of  its
$0.001 par value common stock.

During  June  1998, the Company issued 2,000,000  shares  of  its
$0.001 par value common stock to the sole officer and director in
exchange for a subscriptions receivable of $2,000.

In  March 2002, the sole officer and director of the Company paid
for  expenses  totaling $2,000 to cancel the  entire  balance  of
subscriptions receivable.





                                 -22-          F-9




              Quality Exchange, Inc. and Subsidiary
                  (A Development Stage Company)
                              Notes

In February 2003, the Company closed its offering registered with
Form SB-2 and issued a total of 250,000 shares of its $0.001  par
value common stock in exchange for cash of $25,000.

As  of  December 31, 2003, there have been no other issuances  of
common stock.

Note 7 - Related party transactions

During  the  year ended December 31, 2003, the sole  officer  and
director loaned the Company a total of $100.  As of December  31,
2003  the total amount owed is $9,040.  This amount does not bear
any interest and is due upon demand.

Office  space  and  services are provided  without  charge  by  a
director  and  shareholder.  Such costs  are  immaterial  to  the
financial  statements and, accordingly, have not  been  reflected
therein.   The officers and directors of the Company are involved
in  other  business  activities and may, in  the  future,  become
involved in other business opportunities.  If a specific business
opportunity becomes available, such persons may face  a  conflict
in  selecting  between  the  Company  and  their  other  business
interests.   The  Company has not formulated  a  policy  for  the
resolution of such conflicts.

Note 8 - Warrants and options

As  of  December  31, 2003 and 2002, there were  no  warrants  or
options  outstanding to acquire any additional shares  of  common
stock.





















                                 -23-          F-10





ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

     None--Not Applicable

                            PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     The  following  table  sets forth certain  information  with
respect to each of our executive officers or directors.

              NAME            Age      POSITION
       -----------------------------------------------------------
        Andrew D. Owens       33     President, CEO and Director

     The  person  named above has held his office/position  since
inception  of  QEI  and is expected to hold  his  office/position
until the next annual meeting of QEI' stockholders.

Directors, Executive Officers and Significant Employees

     Andrew  D.  Owens,  President & CEO,  Secretary,  Treasurer,
Director,  is  a seasoned professional in the comic  book  field.
Mr.  Owens  was an independent contractor, whose responsibilities
were  to  draw, complete others artwork, handle quality assurance
and  make  sure  the artwork was complete to meet the  publishers
publication  deadlines, on several premier comic series  at  many
major  comic  companies, including Image Comic's Top Cow  studios
(October 1999 to October 2000), Dark Horse Comics (August 2000 to
present), Marvel Comics (September 2000 to present), and now D.C.
Comics  (September 2001 to present).  Mr. Owens is currently  one
of  the artists working on Batman published by D.C. Comics.   Mr.
Owens  creative credits at Top Cow studios included work on  such
titles  as  Witchblade (now a television series), Ascension,  The
Darkness,  Lady  Pendragon,  and the comic-book  version  of  the
popular video game and motion picture Tomb Raider.  At Dark Horse
Comics,  Mr.  Owens worked on a comic book based on  the  popular
television series Buffy the Vampire Slayer and launched the comic
book  version of the hit WB television series Angel.   Mr.  Owens
also  worked on Fray - a comic book title created and written  by
Joss  Whedon, the creator of the entire Buffy the Vampire  Slayer
franchise.  At Marvel Comics, Mr. Owens worked on one of the best-
selling  titles  in  the industry, The X-Men,  and  a  number  of
related titles such as Magneto, Cable, and X-Force.

     Mr.  Owens expects to spend 30% of his time working for  QEI
until the point when Mr. Owens has began to make a salary.   When
Mr.  Owens  begins to make a salary (if QEI achieves  $10,000  in
monthly  sales), he anticipates spending 60% or more of his  time
working for QEI.

Board Committees

     We  currently have no compensation committee or other  board
committee   performing  equivalent  functions.   Currently,   all
members  of  our  board of directors participate  in  discussions
concerning executive officer compensation.

Involvement on Certain Material Legal Proceedings During the Last
Five Years

     No director, officer, significant employee or consultant has
been  convicted  in a criminal proceeding, exclusive  of  traffic
violations.

     No  bankruptcy petitions have been filed by or  against  any
business  or  property  of  any  director,  officer,  significant
employee  or  consultant of the Company nor  has  any  bankruptcy
petition been filed against a partnership or business association
where these persons were general partners or executive officers.

     No director, officer, significant employee or consultant has
been  permanently or temporarily enjoined, barred,  suspended  or
otherwise  limited  from involvement in  any  type  of  business,
securities or banking activities.

     No  director,  officer  or  significant  employee  has  been
convicted   of  violating  a  federal  or  state  securities   or
commodities law.




                                 -24-





Section 16(a) Beneficial Ownership Reporting Compliance

     Section  16(a) of the Securities Exchange Act  of  1934,  as
amended, requires the Company's directors and executive officers,
and  persons  who beneficially own more than 10% of a  registered
class  of  the  Company's equity securities, to file  reports  of
beneficial ownership and changes in beneficial ownership  of  the
Company's  securities with the SEC on Forms 3 (Initial  Statement
of  Beneficial Ownership), 4 (Statement of Changes of  Beneficial
Ownership  of  Securities) and 5 (Annual Statement of  Beneficial
Ownership  of  Securities).  Directors,  executive  officers  and
beneficial owners of more than 10% of the Company's Common  Stock
are  required  by  SEC regulations to furnish  the  Company  with
copies  of  all  Section 16(a) forms that they file.   Except  as
otherwise set forth herein, based solely on review of the  copies
of   such   forms   furnished   to  the   Company,   or   written
representations  that  no  reports  were  required,  the  Company
believes  that  for  the  fiscal year  ended  December  31,  2003
beneficial  owners  did  not  comply with  Section  16(a)  filing
requirements applicable to them to the extent they filed all form
required under Section 16(a) in February 2004 and had no  trading
activity in 2003.

ITEM 10.  EXECUTIVE COMPENSATION

Remuneration of Directors, Executive Officers and Significant
Employees

                   Summary Compensation Table
<TABLE>
<CAPTION>

                        Annual                               Long-Term Compensation
                     Compensation
                    -------------------            ------------------------------------------
  Name and          Year  Salary  Bonus   Other    Restricted   Securities  LTIP     All
  Principal                               Annual   Stock        Underlying  Payouts  Other
  Position                                Compens  Awards       Options              Compens
                                          ation                                      ation
                           ($)     ($)     ($)      ($)           (#)        ($)      ($)


<S>                  <C>   <C>     <C>     <C>      <C>           <C>        <C>      <C>


Andrew D. Owens     2003    -       -       -        -             -          -        -
President           2002    -       -       -        -             -          -        -
                    2001    -       -       -        -             -          -        -
                    2000    -       -       -        -             -          -        -

</TABLE>

Directors' Compensation

     We have no formal or informal arrangements or agreements to
compensate our directors for services they provide as directors
of our company.

Employment Contracts and Officers' Compensation

     We entered into an employment agreement with Andrew D. Owens
in  April 2003, which was amended on January 1, 2004.  Mr.  Owens
is  engaged  to serve as our President until April 30,  2004,  at
which  time  the  contract will be automatically  renewed  unless
terminated.

Stock Option Plan And Other Long-term Incentive Plan

     We currently do not have existing or proposed option/SAR
grants.

ITEM 11.  SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY
HOLDERS

Security Ownership of Management and Certain Beneficial Owners

     The  following  table  sets forth as of  December  31,  2003
certain  information regarding the beneficial  ownership  of  our
common stock by:

     1.   Each person who is known us to be the beneficial owner of
       more than 5% of the common stock,

     2.   Each of our directors and executive officers and

     3.   All of our directors and executive officers as a group.






                                 -25-




     Except  as  otherwise  indicated, the  persons  or  entities
listed  below have sole voting and investment power with  respect
to  all shares of common stock beneficially owned by them, except
to  the extent such power may be shared with a spouse.  No change
in control is currently being contemplated.

Title of     Name and Address                   Amount and        %  of
Class        of Beneficial Owner                Nature of         Class
                                                Beneficial
                                                Owner
-------------------------------------------------------------------------

Common     Andrew D. Owens, President and        2,000,000        88.9%
Stock      Director(1)

           Officers and Directors as a Group     2,000,000        88.9%

Footnotes:

  (1)  The address of officers and directors in the table is East
     49 Pineridge Court #328, Spokane, Washington 99208.

Change in Control

     No arrangements exist that may result in a change of control
of QEXI.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During June 1998, the Company issued 2,000,000 shares of its
$0.001 par value common stock to Andrew D. Owens, an officer  and
director,  in exchange for a subscription receivable  of  $2,000.
In  March 2002, Andrew D. Owens paid for expenses totaling $2,000
to cancel the entire balance of the subscription receivable.

     QEI  uses office space and services provided without  charge
by Andrew D. Owens, a director and shareholder.

     Andrew Owens has been loaning QEI money to cover operational
expenses  at  no  interest and no certain maturity.   As  of  the
December  31,  2003,  QEI owed Mr. Owens approximately  $9.036.50
used by QEI as follows:

     Documentation Fees                      $4,000.00
     Accounting Fees                         $2,500.00
     State Fees (Corporate filing fees)      $1,035.00
     EDGARization Fees                         $814.00
     Escrow Fee                                $375.00
     Web Development                           $312.50
                                            ------------

     Total Expense Categories to date        $9,036.50
                                            ============






                                 -26-






ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit  Name and/or Identification of Exhibit
Number

  3     Articles of Incorporation & By-Laws
           a.  Articles of Incorporation of Quality Exchange,
           Inc. filed on June 3, 1998, incorporated by reference
           to the Registration Statement on Form SB-2, as
           amended, previously filed with the SEC.
           b.  Bylaws of Quality Exchange, Inc. adopted on June
           17, 1998, incorporated by reference to the
           Registration Statement on Form SB-2, as amended,
           previously filed with the SEC.
           c.  Articles of Incorporation of Orion Publishing,
           Inc. filed on November 21, 2001, incorporated by
           reference to the Registration Statement on Form SB-2,
           as amended, previously filed with the SEC.
           d.  Bylaws of Orion Publishing, Inc. adopted on
           December 3, 2001, incorporated by reference to the
           Registration Statement on Form SB-2, as amended,
           previously filed with the SEC.

  21    Subsidiaries of the Registrant, incorporated by reference
        to the Registration Statement on Form SB-2, as amended,
        previously filed with the SEC.

  31    Rule 13a-14(a)/15d-14(a) Certifications

  32    Certification under Section 906 of the Sarbanes-Oxley Act
        (18 U.S.C. Section 1350) - Andrew D. Owens

ITEM 14.  CONTROLS AND PROCEDURES

     Within  90 days prior to the date of filing of this  report,
we  carried out an evaluation, under the supervision and with the
participation  of our management, including the  Chief  Executive
Officer  and  our  Chief Financial Officer,  of  the  design  and
operation  of our disclosure controls and procedures.   Based  on
this  evaluation, our Chief Executive Officer and Chief Financial
Officer   have   concluded  that  our  disclosure  controls   and
procedures  are  effective  for  the  gathering,  analyzing   and
disclosing  the  information we are required to disclose  in  the
reports we file under the Securities Exchange Act of 1934, within
the  time periods specified in the SEC's rules and forms.   There
have  been no significant changes in our internal controls or  in
other  factors that could significantly affect internal  controls
subsequent to the date of this evaluation.









                                 -27-






                           SIGNATURES

     Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Company has duly caused this report  to
be  signed  on  its  behalf  by the undersigned,  thereunto  duly
authorized.

                     Quality Exchange, Inc.
                     ----------------------


     Signature               Title                  Date
     ---------               -----                  ----

/s/ Andrew D. Owens     Chief Executive        March 25, 2004
--------------------      Officer and
  Andrew D. Owens       Chief Financial
                            Officer































                                 -28-