<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, 2004

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

                         COMMISSION FILE NUMBER 0-28015

                             ALTERNATE ENERGY CORP.
             (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.)

                        3325 North Service Rd, Suite 105
                               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, 2004 was
130,994,941 shares.





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================================================================================

ALTERNATE ENERGY CORP.
CONDENSED BALANCE SHEET

                                                      June, 30     December, 31
Unaudited                                               2004            2003
--------------------------------------------------------------------------------
ASSETS
      BANK                                         $   1730029       $   411727
      TECHNOLOGY ASSETS                                1970248          1969236
      PREPAID EXPENSE                                  1089396          3161257
                                                   -----------       ----------
                                                   $   4789673       $  5542220
                                                   ===========       ==========

LIABILITIES
Current
     ACCOUNTS PAYABLE AND ACCRUED LIABILITIES      $    433419       $   263954
     LOANS PAYABLE                                      164582           180362
     STOCK OPTION LIABILITY                             846780           846780
                                                   -----------       ----------
                                                       1444781          1291096


SHAREHOLDERS' EQUITY
Capital stock (Note 2)                                 2879242           125747
Additional paid in capital                            18923253         18696548
Deficit                                              (18457603)       (14571171)
                                                   -----------       ----------
                                                       3344892          4251124
                                                   -----------       ----------
                                                   $   4789673       $  5542220
                                                   ===========       ==========

See accompanying notes to the financial statements.

                                       2





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ALTERNATE ENERGY CORP.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)

Three Months Ending June 30                        2004               2003
-------------------------------------------------------------------------------

Revenue                                        $        NIL        $        NIL
                                               -------------       ------------

Expenses

     Management fees                                24,697                   0
     Professional fees                              19,475                   0
     Consulting                                  2,914,571                   0
     Administrative                                237,586               6,778
                                               -------------       ------------
                                                 3,196,329               6,778
                                               -------------       ------------

Net earnings (loss)                            $(3,196,329)        $    (6,778)
                                               ------------        ------------

Weighted basic average shares                  130,847,668          13,180,291
                                               ============        ============

See accompanying notes to the financial statements

                                       3





<PAGE>
<TABLE>

ALTERNATE ENERGY CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ending June 30                                   2004              2003
-----------------------------------------------------------------------------------------
<S>                                                       <C>               <C>
Cash flows from (applied to)

     OPERATING
            NET EARNINGS (loss)                           $(3,196,329)      $    (6,778)
            SERVICES FOR STOCK                                227,000                 0
                                                          ------------      ------------
                                                           (2,969,329)           (6,778)
     Changes in
            ACCOUNTS PAYABLE AND ACCRUED LIABILITIES          156,242             6,778
            PREPAID EXPENSE                                (2,114,175)                0
                                                          ------------      ------------
                                                             (638,912)           (6,778)

      FINANCING ACTIVITIES
            CHANGE IN ACCUMULATED/OTHER COMPREHENSIVE INCOME    1,883                 0
            ADVANCES FROM (TO) DIRECTOR                       (34,220)                0
                                                          ------------      ------------
                                                               36,103                 0
                                                          ------------      ------------
      INVESTING ACTIVITIES
            PURCHASE OF TECHNOLOGY ASSETS                      (1,012)                0
                                                          ------------      ------------

Net increase (decrease) in cash during the year              (603,821)                0

Cash, beginning of period                                   2,333,850                 0
                                                          ------------      ------------

Cash, end of period                                       $ 1,730,029       $         0
                                                          ------------      ------------
</TABLE>

See accompanying notes to the financial statements.

                                       4





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ALTERNATE ENERGY CORP.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(Unaudited) June 30, 2004

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 for
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, 2003 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, 2004 to purchase 4,246,385 of
common stock, December 31, 2003 - 4,326,385.

Basic weighted average shares outstanding June 30, 2003 were 130,847,668,
December 31, 2003 - 125,746,895.

2. CAPITAL STOCK

There were 294,546 common stock issued during this period.

                                       5





<PAGE>

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

GENERAL

         The following discussion and analysis should be read in conjunction
with the financial statements, and the notes thereto included herein. The
information contained below includes statements of AEC's or management's
beliefs, expectations, hopes, goals and plans that, if not historical, are
forward-looking statements subject to certain risks and uncertainties that could
cause actual results to differ materially from those anticipated in the
forward-looking statements. For a discussion on forward-looking statements, see
the information set forth in the Introductory Note to this annual report under
the caption "Forward Looking Statements", which information is incorporated
herein by reference.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND NEW ACCOUNTING PRONOUNCEMENTS

         Management's discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
that we make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. At each balance sheet date, management evaluates its estimates.
We base our estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances. Actual results may
differ from these estimates under different assumptions or conditions. The
estimates and critical accounting policies that are most important in fully
understanding and evaluating our financial condition and results of operations
include those listed below:

DEFERRED CONSULTING COSTS

         Shares have been issued to service providers and consultants over the
term of contracts ranging from 1 to 3 years. Shares have been issued at the fair
market value price at date of contract signing and the expense will be amortized
over the term of the contract.

IMPAIRMENT OF INTANGIBLE ASSETS WITH INDEFINITE LIVES

         On May 22, 2003, the Company adopted SFAS No 142, "Goodwill and Other
Intangible Assets." Under the new statement, the Company no longer amortizes
intangible assets with indefinite lives, but instead tests for impairment on at
least an annual basis. In accordance with SFAS No. 142, the Company evaluates

                                       6





<PAGE>

the carrying value of other intangible assets annually as of December 31 and
between annual evaluations if events occur or circumstances change that would
more likely than not reduce the fair value of the reporting unit below its
carrying amount. Such circumstances could include, but are not limited to, (1) a
significant adverse change in legal factors or in business climate, (2)
unanticipated competition, or (3) an adverse action or assessment by a
regulator. When evaluating whether the other intangible asset is impaired, the
Company compares the fair value of the reporting unit to which the other
intangible asset is assigned to its carrying amount. If the carrying amount of a
reporting unit exceeds its fair value, then the amount of the impairment loss
must be measured. The impairment loss would be calculated by comparing the
implied fair value of reporting unit to its carrying amount. In calculating the
implied fair value of the other intangible assets, the fair value of the
reporting unit is allocated to all of the other assets and liabilities of that
unit based on their fair values. The excess of the fair value of a reporting
unit over the amount assigned to its other assets and liabilities is the implied
fair value of its intangibles. The initial evaluation of the intangible assets
completed as of October 1, 2003 in accordance with SFAS No. 142 resulted in no
impairment losses. Additionally, the Company performed its periodic review of
its intangible assets for impairment as of December 31, 2003, and did not
identify any asset impairment as a result of the review.

STOCK OPTION PLANS

         The Company applies the fair value based method of accounting
prescribed by SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION in
accounting for its stock options granted to both employees and non-employees. As
such, compensation expense is recorded on the date of grant based on the fair
market value of the stock and expensed in the period which the option was
granted.

RESULTS OF OPERATIONS

         FOR FISCAL QUARTER ENDED JUNE 30, 2004, COMPARED TO THE FISCAL QUARTER
         ENDED JUNE 30, 2003

         REVENUES

         For the fiscal quarter ended June 30, 2004 and June 30, 2003, AEC had
no revenues. AEC continues its efforts to develop its hydrogen production
system.

         EXPENSES

         AEC had total expenses of $3,196,329 and $6,778 in the fiscal quarter
ended June 30, 2004 and June 30, 2003, respectively. AEC's expenses for the
fiscal quarter ended June 30, 2004 consisted of $237,586 in administrative
expenses, $2,914,571 in consulting fees, $24,697 in management fees, and $19,475
in professional fees. During the fiscal quarter ended June 30, 2003, AEC's
expenses were substantially lower than in fiscal quarter ended June 30, 2004,
mostly due to consulting fees, which were $0 in the 2003 period. Over the next
12 months, AEC anticipates that its expenses will increase over its expenses in
fiscal year 2003 as a result of AEC's continuation of the development of its
hydrogen production system.

                                       7





<PAGE>

         NET LOSS

         AEC had a net loss of $3,196,329 for the fiscal quarter ended June 30,
2004, compared with a net loss of $6,778 for the fiscal quarter ended June 30,
2003. The increase of $3,189,551 in the net loss for the 2004 fiscal quarter
compared to the 2003 fiscal quarter relates mainly to the increase in consulting
fees in the 2004 period. Management believes that, for the fiscal year ending
December 31, 2004, AEC will only be able to reduce its net loss if AEC can
create and sustain significant revenues from its hydrogen production system.

LIQUIDITY AND CAPITAL RESOURCES

         AEC's financial statements have been prepared on a going concern basis
that contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. AEC incurred a net loss of
$3,196,329 and $6778 for the quarters ended June 30, 2004 and June 30, 2003,
respectively, and has an accumulated deficit of $18,457,603 at June 30, 2004.
AEC had $1,730,029 in cash on hand as of June 30, 2004. Management may obtain
additional capital principally through the sale of equity securities. The
realization of assets and satisfaction of liabilities in the normal course of
business is dependent upon AEC ultimately obtaining profitable operations.
However, no assurances can be given that AEC will be successful in these
activities. Should any of these events not occur, the accompanying financial
statements will be materially affected.

         AEC is at present meeting its current obligations from financing
activities. However, due to no cash generated from operations, AEC currently
does not internally generated cash sufficient to pay all of its incurred
expenses and other liabilities. As a result, AEC is dependent on investor
capital and loans to meet its expenses and obligations. Although investor funds
have allowed AEC to meet its obligations in the recent past, there can be no
assurances that AEC's present methods of generating cash flow will be sufficient
to meet future obligations. Historically, AEC has, from time to time, been able
to raise additional capital, but there can be no assurances that AEC will be
able to raise additional capital in this manner.

         Net cash used in operating activities was $603,821 for the three month
period ended June 30, 2004.

         Net cash obtained from financing activities was $36,103 for the three
month period ended June 30, 2004, compared with $0 for the three month period
ended June 30, 2003. In the 2004 period, the Company issued shares of common
stock for $294,546.

         In January 2004, AEC entered into a Securities Purchase Agreement with
Palisades Master Fund LP, Crescent International Ltd., Alpha Capital AG, Bristol
Investment Fund, Ltd., Ellis International Limited, Inc., Vertical Ventures,
LLC, Platinum Partners, Abraham Schwartz, Colbart Birnet, Chana Braun, Ronald
Nash, Marketwise Trading, West End Convertible Fund, and a trust account
pursuant to which AEC sold a total of 5,500,000 shares of common stock at a
price of $0.50 per share and warrants to purchase a total of 2,750,000 shares of
common stock at an exercise price of $0.85 per share. The warrants have a three
year term. AEC received gross proceeds of $2,750,000 from this transaction.

                                       8





<PAGE>

         In December 2003, AEC entered into a Securities Purchase Agreement with
LRG Holdings Inc., Professional Traders Fund LLC, Generation Capital Associates,
First Mirage Inc., Truk Opportunity Fund LLC, pursuant to which AEC sold a total
of 1,060,000 shares of common stock at a price of $0.50 per share and warrants
to purchase a total of 471,112 shares of common stock and an exercise price of
$1.20 per share. The warrants have a three year term. AEC received gross
proceeds of $530,000 from this transaction.

         May 22, 2003, AEC issued 104,870,715 shares of common stock to AEC1,
Inc. in exchange for technology, products and licenses.

         AEC expects to have sufficient cash to meet its short-term capital
requirements. However, there are no assurances that AEC will be able to raise
sufficient funds to meet long-term capital needs. AEC may also seek alternative
sources of financing, including from more conventional sources such as bank
loans and credit lines. Again, no assurances can be given that AEC will be able
to meet its needs through the sale of securities or otherwise. Further, the
availability of any future financing may not be on terms that are satisfactory
to AEC.

         From time to time, AEC may evaluate potential acquisitions involving
complementary businesses, content, products or technologies. AEC has no present
agreements or understanding with respect to any such acquisition. AEC's future
capital requirements will depend on many factors, including growth of AEC's
business, the success of its operations, economic conditions and other factors
including the results of future operations.

PLAN OF OPERATION

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

         The prototype units are being tested in our newly built lab in order
that the design will allow for the production of hydrogen in a safe and cost
effective manner. The technology will need to go through extensive safety
testing and will have to meet various standards prior to placement in homes and
businesses.

         In order to accomplish these steps management estimates that the
Company we will require several million dollars. 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.

                                       9





<PAGE>

         Concurrently, AEC is meeting with potential strategic partners that can
help provide the company with technical assistance to mass produce the product
and associated technology and provide a national and international marketing
presence. It is envisioned that these partners will help the company with the
hydrogen production system 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 businesses. It is anticipated that the safety testing
and the other steps outlined above is expected to be accomplished in the next 12
months.

         In order to accomplish these steps management estimates that the
Company will require additional funding in the next 12 months. 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.

         The Company, formerly known as COI Solutions, was incorporated in
Nevada on August 1, 1997. The Company purchased technology, licenses and patents
from AEC I, Inc (formerly Alternate Energy Corporation) on May 22, 2003 for
104,870,715 restricted shares of the Company. The issuance of the shares of the
corporation from treasury made AEC,I the majority shareholder. However, AEC,I
will not be merged or consolidated with Alternate Energy Corp.

         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.

         AEC currently has 8 full time employees. In conjunction with the
production of our units as well as increased administrative activity it is
anticipated that the Company will have a total of 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 Chairman, Mr. Blaine
Froats, and Mr. Jack Wasserman, Treasurer. Based upon that evaluation, our
Chairman and Treasurer 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.

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<PAGE>

         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.

                                     PART II

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, while under prior management, engaged in a scheme to pay illegal
kickbacks to representatives of a European fund contrived by the FBI and made
false and misleading statements in filing on Form S-8. The SEC is seeking
injunctive relief enjoining any violations of the securities laws and is also
seeking civil penalties.

ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS

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

Not applicable

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(b) No reports on Form 8-K have been filed for the period ended June 30, 2004.

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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 10TH DAY OF AUGUST, 2004

                              ALTERNATE ENERGY CORP.

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

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

                                       12