<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                 FOR THE QUARTERLY PERIOD ENDING JUNE 30, 2003

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

                         COMMISSION FILE NUMBER 0-28015

                       ALTERNATE ENERGY CORPORATION, INC.
             (Exact name of registrant as specified in its charter)

           Nevada                                               86-0884116
        - - - - - -                                         - - - - - - - - - -
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                             Identification No.)



                           105-3325 North Service Road
                               Burlington, Ontario
                                 Canada L7N 3G2
                    (Address of principal executive offices)

         Registrant's telephone number including area code: 905.332.3110

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                         Common shares, $0.001 par value

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

Yes [X] No [ ]

The number of common shares without par value outstanding on June 30, 2003 was
110,399,377 Shares.

<PAGE>
<TABLE>

ALTERNATE ENERGY CORPORATION, INC.
CONDENSED BALANCE SHEET

<CAPTION>

                                                               June, 30         March, 31
Unaudited                                                        2003             2003
-------------------------------------------------------------------------------------------
<S>                                                        <C>                <C>
Assets                                                     $         --       $         --
Patents and Technology                                           62,863
                                                           =============      =============



LIABILITIES
Current
             Accounts payable and accrued liabilities      $    113,345       $      6,778
                 Loans payable                                      100            202,000
                                                           -------------      -------------

                                                                113,445            208,778
                                                           -------------      -------------


SHAREHOLDERS' EQUITY
Capital stock (Note 2)                                          118,436             13,181
Additional paid in capital                                   10,664,554         10,503,691
Deficit                                                     (10,833,572)       (10,725,650)
                                                           -------------      -------------

                                                                (50,582)          (208,778)
                                                           -------------      -------------

                                                           $     62,863       $          0
                                                           =============      =============


See accompanying notes to the financial statements.
-------------------------------------------------------------------------------------------
</TABLE>

                                                 2
<PAGE>

ALTERNATE ENERGY CORPORATION, INC.
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)

Three months ending June 30                     2003                  2003
--------------------------------------------------------------------------------

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


Expenses
         Management fees                                0                     0
         Professional fees                          4,025                     0
         Consulting                                     0                     0
         Administrative                           103,897                 6,778
         Goodwill amortization                          0                     0
                                            --------------        --------------
                                                  107,922                 6,778
                                            --------------        --------------

Net earnings (loss)                              (107,922)               (6,778)
                                            ==============        ==============



Basic Net loss per share                               --                  0.00



Weighted basic average shares                 110,399,377            13,180,296
                                            ==============        ==============



See accompanying notes to the financial statements.
--------------------------------------------------------------------------------

                                       3
<PAGE>
<TABLE>

ALTERNATE ENERGY CORPORATION, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<CAPTION>

Three months ending June 30                                     2003           2003
--------------------------------------------------------------------------------------
<S>                                                         <C>             <C>
Cash flows from (applied to)

Operating
             Net earnings (loss)                             (107,922)         (6,778)
             Goodwill amortization                                 --              --

Changes in
              Accounts payable and accrued liabilities        106,567           6,778
                                                            ----------      ----------

                                                               (1,355)              0
                                                            ----------      ----------

Investing
       Purchase of Patents and Technology                     (62,863)             --




Financing

             Loan Payable                                    (201,900)             --

             Issuance of shares                               266,118              --
                                                            ----------      ----------


                                                               64,218              --
                                                            ----------      ----------


Net increase (decrease) in cash during the year                     0               0

Cash beginning of period                                            0               0

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

Cash end of period                                          $      --       $      --
                                                            ----------      ----------


See accompanying notes to the financial statements.
--------------------------------------------------------------------------------------
</TABLE>

                                                 4
<PAGE>

ALTERNATE ENERGY CORPORATION, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(Unaudited) March 31, 2003
--------------------------------------------------------------------------------

1.       GENERAL

         The unaudited condensed statements have been prepared on the same basis
         as the audited financial statements and, in the opinion of management,
         reflect all adjustments (consisting of normal recurring adjustments)
         necessary for a fair presentation for each of the periods presented.
         The results of operations or interim statements are not necessarily
         indicative of results to be achieved for full fiscal years.

         As contemplated by the Securities and Exchange Commission (SEC) under
         Rule 10-01 of Regulation S-X, the accompanying financial statements and
         related footnotes have been condensed and do not contain certain
         information that will be included in THE COMPANY'S annual financial
         statements and footnotes thereto. For further information, refer to the
         financial statements and related footnotes for the year ended December
         31, 2002 included in THE COMPANY'S Annual Report on Form 10-KSB.

         INCOME TAXES

         Income taxes for the interim periods were computed using the effective
         tax rate estimated to be applicable for the full fiscal year, which is
         subject to ongoing review and evaluation by management. There are no
         income taxes for the current period as THE COMPANY has approximately
         $966,049 of net operating loss carry-forwards, which expires between
         2007 to 2009. The realization of the tax loss carry-forward is
         contingent upon certain facts and circumstances, therefore the Company
         may not be able to realize the net operating loss carry-forward.

         LOSS PER SHARE

         THE COMPANY reports earnings per share in accordance with the
         provisions of SFAS No. 128, EARNING PER SHARE. SFAS No 128 requires
         presentation of basic and diluted earnings per share in conjunction
         with the disclosure of the methodology used in computing such earnings
         per share. Basic earnings per share excludes dilution and is computed
         by dividing income available to common shares by the weighted average
         common shares outstanding during the period. Diluted earnings per share
         takes into account the potential dilution that could occur if the
         securities or other CONTRACTS to issue stock were exercised and
         converted to common stock.

         There were stock options outstanding at June 30,2003 to purchase
         4,241,136 of common stock March 31, 2003- 310,500.

         Basic weighted average shares outstanding June 30, 2003 were
         110,339,377. March 31, 2003 - 13,180,296.


2.       CAPITAL STOCK

         There were 105,255,000 shares issued for this period as well as
         4,100,000 shares issued in stock options.

                                       5
<PAGE>

ITEM. 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

These discussions contain forward-looking statements containing words such AS
WILL CONTINUE TO BE, WILL BE, CONTINUE TO, ANTICIPATES THAT, TO BE or CAN
IMPACT. Management cautions that forward-looking statements are subject to risks
and uncertainties that could cause The Company's actual results to differ
materially from those projected in forward-looking statements.

For the quarter ended June 30, 2003, The Company began operations under the new
name Alternate Energy Corporation (AEC) with a newly appointed board of
directors. The company will continue on with its commitment to bringing
practical and environmentally responsible power solutions to market.

The company (AEC) owns patented technologies that enable electric utility
companies and large multi-national industrial companies to significantly
increase their power output. This is accomplished without increasing the amount
of fossil fuel that is used, which provides two additional benefits: less
dependency on imported fossil fuels and lower fossil fuel pollution levels.
AEC's patented technologies provide this increased power through reclaiming heat
energy that is typically lost to the environment when producing electric power
and also through reducing the cost and complexity of the equipment required in
typical utility operations. AEC technologies can enable the North American
Electric Utility industry to produce more power and grow its annual revenues
without changing the industry's current level of operating costs. AEC plans to
collect a percentage of the new revenues generated by these utilities.

AEC's technology and partner relationships also have application in the small
business and residential markets. AEC will pursue future opportunities to
generate cost efficient and environmentally friendly power in these markets.


(a)      Plan of Operation

AEC is currently building and testing a prototype hydrogen production system
that is one of the key elements to producing a viable fuel cell to be used in
both residential and commercial applications. The prototype is being built at
AEC's facility with certain components being provided by outside contractors.

Once the prototype is completed, AEC will commence testing to ensure that the
design allows for the production hydrogen in a safe and cost effective manner.

                                       6
<PAGE>

Concurrently, AEC is meeting with potential strategic partners that can help
provide the company with technical assistance to mass produce the fuel cell and
associated technology and provide a national and international marketing
presence. It is envisioned that this partner will help the company initiate a
beta test of the technology, placing it with various residential and commercial
customers. Additionally, the technology will need to go through extensive safety
testing and will have to meet various government safety standards for placement
in homes and businesses. It is anticipated that the safety testing and the other
steps outlined above will be accomplished in the next 12 months.

In order to accomplish these steps Management estimates that the Company we will
require about $1 million. As the company does not have any current revenue, such
funds will come from loans from officers and private placements of the company's
common stock.

AEC currently has 6 full time employees. In conjunction with the production of
prototypes and expected beta testing it is anticipated that the Company will
have 12 full time employees at the end of 12 months.


ITEM 3. CONTROLS AND PROCEDURES.

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
`EXCHANGE ACT'), we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures within the 90 days prior
to the filing date of this report. This evaluation was carried out under the
supervision and with the participation of our new Chairman, Mr. Blaine C Froats,
and Mr. Sean C Froats, Secretary. Based upon that evaluation, our Chairman and
Secretary concluded that our disclosure controls and procedures are effective in
timely alerting management to material information relating to us required to be
included in our periodic SEC filings. There have been no significant changes in
our internal controls or in other factors that could significantly affect
internal controls subsequent to the date we carried out our evaluation.

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

Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed our reports filed
or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.
--------------------------------------------------------------------------------


                                       7
<PAGE>

                                    PART III

ITEM 1. LEGAL PROCEEDINGS

On August 15, 2002 the Securities and Exchange Commission filed a civil lawsuit
against the company, its former CEO and other individuals. SEC v COI Solutions,
et al. Case No. 02-80766-CIV-Hurley. The SEC alleges in its complaint that COI
Solutions engaged in a scheme to pay illegal kickbacks to representatives of a
European fund contrived by the FBI and making false and misleading statements in
a filing on Form S-8. The SEC is seeking injunctive relief enjoining any
violations of the securities laws in the future and is also seeking civil
penalties.

ITEM 2.  CHANGE IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES

None.

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

None.

ITEM 5.  CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

On April 15, 2003 the Board of Directors of the company informed its certifying
accountant, Marvin B. Seidman, CPA, that the Company would instead be using
Danziger & Hochman CA, as its certifying accountants.

In the past fiscal year Marvin B. Seidman included a "going concern" opinion in
their audit report. There were no disagreements with the former accountants.

The Company has subsequently engaged Danziger & Hochman CA, as the Company's
certifying accountant.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(b) An 8-K has been filed with the SEC on May 22, 2003.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, THE
REGISTRANT has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.

DATED THIS 31ST DAY OF JULY, 2003

                                             ALTERNATE ENERGY CORPORATION, INC.

                                             BY: /S/ BLAINE FROATS
                                                 - - - - - - - - - - - - - - - -
                                                 BLAINE  FROATS,
                                                 CHAIRMAN/CEO AND A MEMBER
                                                 OF THE BOARD OF DIRECTORS

                                       8
<PAGE>

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

     CERTIFICATION PURSUANT TO SECTION 302 OF THE ARBANES-OXLEY ACT OF 2002

                         I, Blaine Froats, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of AEC, Inc. (the
         "REGISTRANT");

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

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         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 (the "EVALUATION DATE");

(c)      Presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         required evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

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

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

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


                                          BY /S/ BLAINE FROATS
                                             - - - - - - - - - - - - - -
                                             BLAINE FROATS
                                             CHAIRMAN OF THE BOARD OF DIRECTORS

     Date:  July 31, 2003



                                       9
<PAGE>

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

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

                         I, Sean C Froats, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of AEC, Inc. (the
         "REGISTRANT");

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this quarterly 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.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14 ) for the registrant
         and 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
         quarterly report (the "EVALUATION DATE"); and

(c)      Presented in this annual report our conclusions about the effectiveness
         of the disclosure controls and procedures based on our required
         evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

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

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

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


                                                    BY /S/ SEAN C FROATS
                                                       - - - -- - -- - - - -- -
                                                       SEAN FROATS
                                                       SECRETARY

Date:  July 31, 2003
--------------------------------------------------------------------------------


                                       10