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

                         FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
              For the fiscal year ended 2002

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
              For the transition period from ______________ to ____________

              Commission file number ________________________________

                     Quality Exchange, Inc.
                 -------------------------------
         (Name of small business issuer in its charter)

           Nevada                            41-2033500
      ----------------                     ---------------
  (State or jurisdiction of               (I.R.S. Employer
      incorporation or                   Identification No.)
        organization)

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

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

Securities registered under Section 12(b) of the Exchange Act:

Title of each class          Name of each exchange on which registered
---------------------------     -------------------------------
---------------------------     -------------------------------

Securities registered under Section 12(g) of the Exchange Act:

Common stock, $0.001 par value, 25,000,000 shares authorized
*    2,000,000 shares issued and outstanding as of December 31, 2002
*    2,250,000 shares issued and outstanding as of March 27, 2003

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

Check if disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and  no
disclosure  will  be contained, to the best of  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. [X]

State issuer's revenues for its most recent fiscal year: $0
for the year ended December 31, 2002.

State  the  aggregate market value of the  voting  and  non-
voting  common  equity  held by non-affiliates  computed  by
reference to the price at which the common equity was  sold:
$25,000 as of March 27, 2003.


PAGE-1-






                      TABLE OF CONTENTS




PART I	                                                          3


Item 1. Description of 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 Plan of Operation.	          9

Item 7. Financial Statements.	                                 12

Item 8. Changes In and Disagreements With Accountants on
        Accounting and Financial Disclosure	                 24


PART III	                                                 25


Item 9. Directors, Executive Officers, Promoters and Control
        Persons	                                                 25

Item 10. Executive Compensation.                             	 26

Item 11. Security Ownership of Certain Beneficial Owners
         and Management.	                                 26

Item 12. Certain Relationships and Related Transactions.	 26

Item 13. Exhibits and Reports on Form 8-K.	                 27

Item 14. Controls and Procedures.	                         27


SIGNATURES	                                                 28














PAGE-2-


PART I

Item 1. Description of Business.

A.   Business Development and Summary

Quality   Exchange,  Inc.  ("QEI"  or  the  "Company")   was
incorporated in the State of Nevada on June 3, 1998.  QEI, a
development   stage  company,  through  its   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, Inc., 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.

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

QEI' fiscal year end is December 31.

B.   Business of Issuer

(1)  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,    QEI's    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.  QEI 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  QEI's 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.  QEI is implementing a simple click-
through sign-up procedure with clear instructions allowing a
quick  and  easy access to QEI's secure website.  Among  the
special  features that QEI plans to build into  its  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 QEI's 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.   QEI  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 QEI to
begin  working  on  solutions to  reported  problems  almost
immediately.


PAGE-3-


QEI  will  dedicate  a concerted effort  to  protecting  the
identity  of  its service and ensuring the security  of  its
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.

(2)  Distribution Methods of the Products or Services

In  its  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 its 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.  QEI  plans  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.

(3)  Status of any announced new product or service

There  are no changes in status of any products and services
disclosed in previous filings with the SEC.  QEI remains  in
the development stage.

(4)  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.


PAGE-4-


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.

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.

QEI  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.

(5)  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.

(6)   Customers

QEI does not have an established client base.  At this time,
QEI  does  not  anticipate  that its  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.



PAGE-5-



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.

(7)  Intellectual Property

QEI   does  not  have  any  patents,  trademarks,  licenses,
franchises, concessions or royalty agreements.

(8)  Need for Government Approval

None.

(9)  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.

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 QEI's business.


PAGE-6-


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 QEI's 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  QEI's services  will  be  accessible
worldwide,  and QEI plans 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 QEI to penalties  ranging from fines to bans on
QEI's ability to offer its services.

(10)  Estimated Amount Spent on Research and Development Activities

During  the  last two fiscal years, QEI spent  approximately
$313 on website development.

(11) Costs and Effects of Compliance with Environmental Laws

Not applicable.

(12) Employees

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

C.   Reports to Security Holders

(1)   QEI will furnish its shareholders with audited annual financial
  reports certified by QEI' independent accountants, and may, in QEI'
  discretion, furnish unaudited quarterly financial reports.

(2)   QEI  is  a  reporting issuer with the  Securities  and
  Exchange  Commission.  QEI will continue  to  file  annual
  reports  on Form 10-KSB, quarterly reports on Form 10-QSB,
  current reports on Form 8-K and amendments to these reports
  filed or furnished pursuant to Section 13(a) or 15(d) of the
  Securities Exchange Act of 1934, as amended as required to
  maintain the fully reporting status.

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


PAGE-7-



Item 2. 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.

Item 3. Legal Proceedings.

QEI  is  not  a  party  to any pending or  threatened  legal
proceeding.

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

During the fourth quarter of the fiscal year 2002, no matter
was  submitted  to  a vote of security holders  through  the
solicitation of proxies or otherwise.

                           PART II

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

Market Information

Until  March  20, 2003, there was no public market  in  QEI'
Common Stock.  As of March 20, 2003, the common stock of QEI
started  to  be quoted on the OTC Bulletin Board  under  the
symbol  "QEXI."  As of the date of this report,  trading  in
QEI's stock has not yet developed.

As of the date of this report,

*     there  are  no  outstanding  options  or  warrants  to
  purchase,  or  other instruments convertible into,  common
  equity of QEI;
*     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
*    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,  QEI  has  approximately
2,250,000 shares of $0.001 par value common stock issued and
outstanding   held   by   approximately   twenty-one    (21)
shareholders  of record.  QEI' Transfer Agent  is  Executive
Registrar & Transfer Agency, 3118 W. Thomas Road, Suite 707,
Phoenix, AZ 85017, phone (602) 415-1273.

Dividends

QEI  has  never declared or paid any cash dividends  on  its
common  stock.  For the foreseeable future, QEI  intends  to
retain any earnings to finance the development and expansion
of  its business, and it does 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 QEI' financial condition and  results
of    operations,    capital    requirements,    contractual
restrictions, business prospects, and other factors that the
board of directors considers relevant.


PAGE-8-



Recent Sales of Unregistered Securities.

In  June 1998, QEI issued 2,000,000 shares of its $0.001 par
value  common  stock  to  Andrew D. Owens,  an  officer  and
director, in exchange for $2,000 in subscription receivable.
The total amount of the transaction was $2,000 or $0.001 per
share.  That sale of stock by QEI did not involve any public
offering  or  solicitation.  At the time  of  the  issuance,
Andrew  D. Owens was in possession of all available material
information about QEI.  Also, Andrew D. Owens had  a  degree
of  financial sophistication, which allowed him to  make  an
independent assessment of the investment merits of QEI.   On
the  basis  of these facts, QEI claims that the issuance  of
stock  to  Andrew D. Owens was qualified for  the  exemption
from   registration  contained  in  Section  4(2)   of   the
Securities Act of 1933.

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 (the "SEC") 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,  QEI
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.  As of the close
of  the  offering,  Andrew D. Owens  advanced  approximately
$6,589 of the expenses of the offering.

Pursuant  to Rule 463 under the Securities Act of 1933,  QEI
plans to report the use of proceeds of the offering pursuant
to  the  Registration Statement in the quarterly  report  on
form  10-QSB for the quarter ending on March 31, 2003,  and,
if applicable, in subsequent periodic filings.

Item 6. Management's Discussion and Plan of Operation.

This  section must be read in conjunction with  the  Audited
Financial Statements included in this report.

A.   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 its 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:
*    recruited and retained a management team and board of directors;
*    developed a business plan; and
*    launched the pilot version of its website, www.comicauction.biz.

In  the  initial  approximately  fifty-five-month  operating
period  from June 3, 1998 (inception) to December 31,  2002,
QEI generated no revenues while incurring $10,695 in general
and  administrative expenses.  This resulted in a cumulative
net loss of $10,695 for the period, which was equivalent  to
$0.00  per  share.  The cumulative net loss was attributable
solely to the costs of start-up operations.


PAGE-9-



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

As  of  February  27, 2003, QEI 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.

B.   Plan of Operation

QEI  expects  that it 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  QEI
will collect from buyers and sellers (1% from the buyer  and
1% from the seller) after each auction is completed.

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

*     establish a paying subscriber/member base and  benefit
  from repeat traffic to the website;
*     develop  strategic alliances with popular web  auction
  sites;
*     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;
*     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, QEI  is
researching  promotional mailing companies, advertising  and
public relations firms that might help QEI in the process.

At  present  time, QEI estimates that in order  to  commence
planned operations it needs 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  QEI's  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.  QEI's marketing budget of $500.00  will  limit
QEI's  ability to execute the entire business plan, but  QEI
believes that the amount is sufficient to get listed on  one
mid-level search engine.




PAGE-10-



QEI  expects  to generate revenue in the first  4  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 it will still be able to sell  its  own
products  via  its  website.  Because these  items  will  be
funded from cash flow, the growth of QEI will be minimal and
it could be difficult for QEI to expand and grow.

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

*     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.

*     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 3
  of at least three or four of top search engines.

*     develop  distribution channels beyond the  website  to
  improve revenues.

QEI  anticipates that over the next twelve (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 (6) to twelve (12)  months  is
important  for  the QEI' plan of operations.   However,  the
Company  cannot guarantee that it will generate such growth.
If  the  Company does not generate sufficient cash  flow  to
support  its operations in the next twelve (12) to  eighteen
(18)  months,  it  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  the Company would be able to  raise  enough
capital to stay in business.







PAGE-11-




Item 7. Financial Statements.















                   Quality Exchange, Inc.
                (A Development Stage Company)

                 Consolidated Balance Sheets
                            as of
                 December 31, 2002 and 2001

                             and

           Consolidated Statements of Operations,
            Changes in Stockholders' Equity, and
                         Cash Flows
                     for the years ended
                 December 31, 2002 and 2001,
                             and
                      for the period of
              June 3, 1998 (Date of Inception)
                           through
                      December 31, 2002































PAGE-12-















                      TABLE OF CONTENTS





                                                     PAGE

Independent Auditor's Report                           1

Balance Sheet                                          2

Statement of Operations                                3

Statement of Changes in Stockholders' Equity           4


Statement of Cash Flows                                5

Footnotes                                            6-10



































PAGE-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.

We  have  audited the Consolidated Balance Sheets of Quality
Exchange,  Inc.  and  its  subsidiary  (the  "Company")   (A
Development Stage Company), as of December 31, 2002, and the
related Consolidated Statements of Operations, Stockholders'
Equity,  and Cash Flows for the year then ended and for  the
period  June  3,  1998 (Date of Inception) to  December  31,
2002.   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.   The
consolidated financial statements of Quality Exchange,  Inc.
and its subsidiary as of December 31, 2001, were audited  by
G.  Brad  Beckstead,  CPA, sole practitioner,  whose  report
dated  April  3,  2002,  on  those  statements  included  an
explanatory going concern paragraph discussed in Note  3  to
the financial statements.

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,
2002,  and the results of its operations and cash flows  for
the year then ended and for the period June 3, 1998 (Date of
Inception)   to  December  31,  2002,  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 24, 2003


PAGE-14-F1







                   Quality Exchange, Inc.
                (a Development Stage Company)
                 Consolidated Balance Sheets



                                            December 31,
                                       -------------------------
                                          2002         2001
Assets                                 -------------------------

Current assets:
 Cash                                  $      245    $       -
   Total current assets                -------------------------
                                              245            -
                                       -------------------------
                                       $      245    $       -
                                       =========================

Liabilities and Stockholder's
(Deficit)

Current liabilities:
 Due to shareholder                    $    8,940    $     275
   Total current liabilities           -------------------------
                                            8,940          275
                                       -------------------------
Stockholder's (deficit):
 Common stock, $0.001 par value,
 25,000,000 shares
   authorized, 2,000,000 shares
  issued and
   outstanding as of 12/31/02 and
  12/31/01, respectively                    2,000        2,000
 Additional paid-in capital
                                                -            -
 Subscriptions (receivable)
                                                -      (2,000)
 (Deficit) accumulated during
 development stage                       (10,695)        (275)
                                       -------------------------
                                          (8,695)        (275)
                                       -------------------------
                                      $      245     $       -
                                       =========================







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









PAGE-15-F2








                   Quality Exchange, Inc.
                (a Development Stage Company)
            Consolidated Statements of Operations



                                                               June 3, 1998
                                      For the years ended    (Inception) to
                                         December 31,          December 31,
                                       2002        2001            2002
                                    ----------   ----------   --------------

Revenue                             $       -    $       -    $        -
                                    ----------   ----------   --------------

Expenses:
 General and administrative
 expenses                              10,420          275        10,695
  Total expenses                    ----------   ----------   --------------
                                       10,420          275        10,695
                                    ----------   ----------   --------------
Net (loss)                          $ (10,420)   $    (275)   $  (10,695)
                                    ==========   ==========   ==============
Weighted average number of
 common shares outstanding - basic
 and fully diluted                  2,000,000    2,000,000
                                    ==========   ==========

Net (loss) per share - basic and
fully diluted                       $  (0.01)    $   (0.00)
                                    ==========   ==========










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



















PAGE-16-F3



                   Quality Exchange, Inc.
                (a Development Stage Company)
 Consolidated Statements of Changes in Stockholders' Equity

                                                          (Deficit)
                                                         Accumulated
                    Common Stock   Additional              During     Total
                                   Paid-in    Subscrip   Development  Stock
                                              tions                   holders'
                   Shares  Amount  Capital   (Receivable)   Stage    (Deficit)
                 -------------------------------------------------------------
June 1998
Founder shares   2,000,000 2,000         -     (2,000)          -           -

Net (loss)
June 3, 1998
(inception) to
December 31, 1998                                               -           -
                 -------------------------------------------------------------
Balance,
December
31, 1998         2,000,000 2,000         -     (2,000)          -           -

Net (loss)
For the year
ended December 31, 1999                                         -           -
                 -------------------------------------------------------------
Balance,
December
31, 1999         2,000,000 2,000         -     (2,000)          -           -

Net (loss)
For the year ended
December 31, 2000                                               -           -
                 -------------------------------------------------------------
Balance,
December
31, 2000         2,000,000 2,000         -     (2,000)          -           -

Net (loss)
For the year ended
December 31,
2001                                                         (275)       (275)
                 -------------------------------------------------------------
Balance,
December         2,000,000 2,000         -     (2,000)       (275)       (275)
31, 2001

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

Net (loss)
For the year
ended
December 31, 2002                                         (10,420)    (10,420)
                 -------------------------------------------------------------
Balance,
December         2,000,000 $ 2,000  $    -   $      -    $(10,695)   $ (8,695)
31, 2002         =============================================================

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


PAGE-17-F4





                   Quality Exchange, Inc.
                (a Development Stage Company)
            Consolidated Statements of Cash Flows




                                                                 June 3, 1998
                                         For the years ended      (Inception)
                                                                      to
                                            December 31,          December 31,
                                           2002       2001            2002
                                        --------------------------------------

Cash flows from operating activities
Net (loss)                              $ (10,420)    (275)         (10,695)

Adjustments to reconcile net (loss) to
 net cash (used) by operating
 activities:
 Increase in due to shareholder
                                            8,665      275            8,940
                                        --------------------------------------
Net cash (used) by operating activities    (1,755)       -           (1,755)
                                        --------------------------------------

Cash flows from investing activities
                                                -        -                -
                                        --------------------------------------
Cash flows from financing activities
 Issuances of common stock
                                            2,000        -            2,000
Net cash provided by financing          --------------------------------------
activities                                  2,000        -            2,000
                                        --------------------------------------
Net increase in cash
                                              245        -              245
Cash - beginning
                                                -        -                -
                                        --------------------------------------
Cash - ending                           $     245   $    -      $       245
                                        ======================================
Supplemental disclosures:
 Interest paid                          $       -   $    -      $         -
                                        ======================================
 Income taxes paid                      $       -   $    -      $         -
                                        ======================================
Non-cash transactions:
 Shares issued for expenses paid for    $   2,000   $    -      $     2,000
 by a founder                           ======================================
 Number of shares issued for expenses
 paid for by a founder                  2,000,000        -        2,000,000
                                        ======================================





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





PAGE-18-F5



                   Quality Exchange, Inc.
                (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, 2002 and 2001.

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, 2002 and 2001.

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 2002 or 2001.

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, 2002 or 2001.

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.



PAGE-19-F6



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, 2002 and 2001.  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.



PAGE-20-F7



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.

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.

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."


PAGE-21-F8


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.

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 $10,695 for the period from June
3,  1998 (inception) to December 31, 2002, 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  has plans to seek additional capital  through  a
private  placement and public offering of its common  stock.
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, 2002, the Company has a  net  operating
loss carry forward as follows:

Year         Amount       Expiration
--------------------------------------
2001         $   275        2021
2002         $10,420        2022

Note 5 - Stockholder's equity

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




PAGE-22-F9



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.  (See Note 6)

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.  (See Note 6)

There have been no other issuances of common stock.

Note 6 - Related party transactions

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 March 2002, the sole officer and director paid
for expenses totaling $2,000.  (See Note 5)

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 7 - Warrants and options

As  of December 31, 2002 and 2001, there were no warrants or
options  outstanding  to acquire any  additional  shares  of
common stock.

Note 8 - Subsequent events

As  of  February  27, 2003, the Company  has  completed  its
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.

























PAGE-23-F10



Item 8. Changes In and Disagreements With Accountants on Accounting
        and Financial Disclosure
None.
































































PAGE-24-


                           PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons

Directors, Executive Officers, Promoters and Control Persons

Each of QEI' directors is elected by the stockholders to a term of one
(1) year and serves until his or her successor is elected and qualified.
Each of the officers is appointed by the Board of Directors to a term of
one (1) year and serves until his or her successor is duly elected and
qualified, or until he or she is removed from office.  The Board of
Directors has no nominating, auditing, or compensation committees.

The following table sets forth certain information regarding the sole
executive officer and director of QEI as of the date of this report:

Name and Address	Age	Position
-------------------   --------  -----------------------------
Andrew D. Owens	         33	President & CEO, Secretary,
                                Treasurer, 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.


Background of Directors, Executive Officers, Promoters and Control Persons

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.

Involvement in Certain Legal Proceedings

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




PAGE-25-


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

Item 10. Executive Compensation.

Summary Compensation Table

                                        	Annual Compensation
------------------------------------------------------------------------------
           (a)          	(b)     (c)           (d)         (e)
------------------------------------------------------------------------------
Name and Principal Position	Year	Salary ($)    Bonus ($)   Other Annual
                                                                  Compensation
                                                                         ($)
------------------------------------------------------------------------------
Andrew D. Owens, President
& CEO, Secretary, Treasurer,
Director                    	2002       0             0              0
                            	2001       0             0              0
                            	2000       0             0              0
------------------------------------------------------------------------------
There are no existing or planned option/SAR grants.

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

The following table sets forth certain information as of the date of this
report with respect to the beneficial ownership of QEI's Common Stock by
all persons known by QEI to be beneficial owners of more than 5% of any
such outstanding classes, and by each director and executive officer, and
by all officers and directors as a group.  Unless otherwise specified, the
named beneficial owner has, to QEI's knowledge, either sole or majority
voting and investment power.

Title      Name and Address of
Of Class   Beneficial Owner of                Amount of shares  Percent of
           Shares                Position     held by Owner     Class
-----------------------------------------------------------------------------
Common     Andrew D. Owens       President       2,000,000        88.89%
           East 49 Pineridge     and CEO,
           Ct #328               Secretary,
           Spokane, WA 99208     Treasurer,
                                 Director

Common                           Executive       2,000,000       88.89%
                                 Officers and
                                 Directors as
                                 a Group

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, 2002,
QEI owed Mr. Owens approximately $8,936.50 used by QEI as follows:


PAGE-26-



Documentation Fees                  $4,000.00
Accounting Fees                     $2,500.00
State Fees (Corporate filing fees)  $1,035.00
EDGARization Fees                     $714.00
Escrow Fee                            $375.00
Web Development                       $312.50
                                   -----------
Total Expense Categories to date    $8,936.50
                                   ===========

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

   (a)	Exhibits required by Item 601 of Regulation S-B

Exhibit
Number   Name and/or Identification of Exhibit
----------------------------------------------------------------------------
  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.

 23.    Consent of Experts and Counsel
         a) Consent of Beckstead and Watts, LLP.
         b) Consent of G. Brad Beckstead, CPA.

 99.    Additional Exhibits
         Certification Pursuant to Title 18, United States Code, Section 1350,
         as Adopted Pursuant to Section 906 Of The Sarbanes-Oxley Act Of 2002.
------------------------------------------------------------------------------

   (b) Reports on Form 8-K

QEI filed no Current Reports on Form 8-K during the last quarter of the fiscal
year ended December 31, 2002.

Item 14. Controls and Procedures.

Based on his most recent review, which was completed within ninety days of the
filing of this report, the Company's Chief Executive Officer and Principal
Financial Officer has concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed
by the Company in the reports it files or submits under the Securities
Exchange Act of 1934, as amended, is accumulated and communicated to the
Company's management, including its Chief Executive Officer and Principal
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure and are effective to ensure that such information is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.  There were no
significant changes in the Company's internal controls or in other factors
that could significantly affect those controls subsequent to the date of
the evaluation.


PAGE-27-






                               SIGNATURES

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

                           Quality Exchange, Inc.
                       -------------------------------
                                (Registrant)


                By: /s/ Andrew D. Owens, President & CEO
                   --------------------------------------

                                March 27, 2003



In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


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

/s/ Andrew D. Owens          President & CEO,                March 27, 2003
-------------------          Secretary, Treasurer,
 Andrew D. Owens             Director

/s/ Andrew D. Owens          Principal Financial Officer     March 27, 2003
-------------------
 Andrew D. Owens

/s/ Andrew D. Owens          Principal Accounting Officer    March 27, 2003
-------------------




























PAGE-28-







           Certification pursuant to the Sarbanes-Oxley Act of 2002


I, Andrew D. Owens, President and Chief Executive Officer and Principal
Financial Officer of Quality Exchange, Inc., certify that:

1.  I have reviewed this annual report on Form 10-KSB of Quality
    Exchange, Inc.;
2.  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which
    such statements were made, not misleading with respect to the period
    covered by this annual report;
3.  Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this annual
    report;
4.  I am responsible for establishing and maintaining disclosure controls and
    procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
    registrant and I have:
    a)  designed such disclosure controls and procedures to ensure that
        material information relating to the registrant, including its
        consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this annual report
        is being prepared;
    b)  evaluated the effectiveness of the registrant's disclosure controls
        and procedures as of a date within 90 days prior to the filing date
        of this annual report ("Evaluation Date"); and
    c)  presented in this annual report my conclusions about the effectiveness
        of the disclosure controls and procedures based on my evaluation as of
        the Evaluation Date;
5.  I have disclosed, based on my most recent evaluation, to the registrant's
    auditors and the audit committee of the registrant's board of directors
    [or persons performing the equivalent function]:
    a)  all significant deficiencies in the design or operation of internal
    controls which could adversely affect the registrant's ability to record,
    process, summarize and report financial data and have identified for the
    registrant's auditors any material weaknesses in internal controls; and
    b)  any fraud, whether or not material, that involves management or other
    employees who have a significant role in the registrant's internal
    controls; and

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



Date:   March 27, 2003
By:    /s/ Andrew D. Owens
       --------------------
Andrew D. Owens, President & CEO
Principal Financial Officer







-PAGE-