<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               Amendment No. 1 to
                                   FORM 10-QSB/A


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

                 For the quarterly period ending March 31, 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 March 31, 2004 was
130,700,395 shares.

<PAGE>

ALTERNATE ENERGY CORP.
CONDENSED BALANCE SHEET


                                                     MARCH, 31      December, 31
Unaudited                                              2004            2003
--------------------------------------------------------------------------------

ASSETS
      BANK                                       $  2,333,850      $    411,727
      TECHNOLOGY ASSETS                             1,969,236         1,969,236
      PREPAID EXPENSE                               3,263,571         3,161,257
                                                 -------------     -------------
                                                 $  7,566,657      $  5,542,220
                                                 =============     =============

LIABILITIES
Current
     Accounts Payable and accrued liabilities    $    277,177      $    263,954
     Loans payable                                    130,362           180,362
     STOCK OPTION LIABILITY                           846,780           846,780
                                                 -------------     -------------
                                                    1,254,319         1,291,096

SHAREHOLDERS' EQUITY
Capital stock (Note 2)                              2,878,947           125,747
Additional paid in capital                         18,696,548        18,696,548
Deficit                                           (15,263,157)      (14,571,171)
                                                 -------------     -------------
                                                    6,312,338         4,251,124
                                                 -------------     -------------
                                                 $  7,566,657      $  5,542,220
                                                 =============     =============

              See accompanying notes to the financial statements.

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

                                       2
<PAGE>

ALTERNATE ENERGY CORP.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)


Three Months Ending March 31                        2004               2003
--------------------------------------------------------------------------------

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

Expenses
     STOCK OPTION BENEFIT                                0              697,000
     Management fees                                67,500              240,000
     Professional fees                             330,289               29,443
     Consulting                                     94,097            2,857,703
     Administrative                                200,100               76,973
Goodwill amortization                                    0                    0
     RECOVERY OF LOAN                                    0             (202,000)
                                             --------------       --------------
                                                   691,986            3,699,119
                                             --------------       --------------


Net earnings (loss)                          $    (691,986)       $  (3,699,119)
                                             --------------       --------------

Weighted basic average shares                  130,700,395           45,798,538
                                             ==============       ==============

               See accompanying notes to the financial statements

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

                                       3
<PAGE>

<TABLE>
ALTERNATE ENERGY CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>

Three Months Ending March 31                                 2004             2003
--------------------------------------------------------------------------------------
<S>                                                      <C>              <C>
Cash flows from (applied to)

     OPERATING
            Net earnings (loss)                          $  (691,986)     $(3,699,119)
            SERVICES FOR STOCK                                     0        7,773,423
            Goodwill amortization                                  0                0
                                                         ------------     ------------
                                                            (691,986)       4,074,304
     Changes in
            Accounts payable and accrued liabilities          13,223           61,954
            PREPAID EXPENSE                                 (102,314)      (3,161,257)
            STOCK OPTION LIABILITY                                 0          693,600
                                                         ------------     ------------
                                                             (89,091)      (2,405,703)

      FINANCING ACTIVITIES
            SHARE SUBSCRIPTION                             2,753,200          532,000
            ADVANCES FROM (TO) DIRECTOR                      (50,000)         180,362
                                                         ------------     ------------
                                                           2,703,200          712,362
                                                         ------------     ------------
      INVESTING ACTIVITIES
            PURCHASE OF INTANGIBLE ASSETS                          0       (1,969,236)
                                                         ------------     ------------

Net increase (decrease) in cash during the year            1,922,123          411,727

Cash, beginning of period                                    411,727                0
                                                         ------------     ------------

Cash, end of period                                      $ 2,333,850      $   411,727
                                                         ------------     ------------

              See accompanying notes to the financial statements.

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

                                           4
</TABLE>
<PAGE>

ALTERNATE ENERGY CORP.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(Unaudited) March 31, 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 March 31, 2004 to purchase 4,246,385 of
common stock, December 31, 2003 - 4,326,385.

                                       5
<PAGE>

Basic weighted average shares outstanding March 31, 2003 were 130,700,395,
December 31, 2003 - 125,746,895.

2. CAPITAL STOCK

There were 5,313,500 common stock issued during this period.

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

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.

                                       6
<PAGE>

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
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 MARCH 31, 2004, COMPARED TO THE FISCAL QUARTER
         ENDED MARCH 31, 2003

         REVENUES

         For the fiscal quarter ended March 31, 2004 and March 31, 2003, AEC had
no revenues. AEC continues its efforts to develop its hydrogen production
system.

         EXPENSES

         AEC had total expenses of $691,986 and $3,699,119 in the fiscal quarter
ended March 31, 2004 and March 31, 2003, respectively. AEC's expenses for the
fiscal quarter ended March 31, 2004 consisted of $200,100 in administrative
expenses, $94,097 in consulting fees, $67,500 in management fees, and $330,289

                                       7
<PAGE>

in professional fees. During the fiscal quarter ended March 31, 2003, AEC's
expenses were substantially higher than in fiscal quarter ended March 31, 2004,
mostly due to consulting fees, which were $2,857,703 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.

         NET LOSS

         AEC had a net loss of $691,986 for the fiscal quarter ended March 31,
2004, compared with a net loss of $3,699,119 for the fiscal quarter ended March
31, 2003. The decrease of $3,007,133 in the net loss for the 2004 fiscal quarter
compared to the 2003 fiscal quarter relates mainly to the decrease 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
$691,986 and $3,699,119 for the quarters ended March 31, 2004 and March 31,
2003, respectively, and has an accumulated deficit of $15,263,157 at March 31,
2004. AEC had $2,333,850 in cash on hand as of March 31, 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 $691,986 for the three month
period ended March 31, 2004.

         Net cash obtained from financing activities was $2,703,200 for the
three month period ended March 31, 2004, compared with $712,362 for the three

                                       8
<PAGE>

month period ended March 31, 2003. In the 2004 period, the Company issued shares
of common stock for $2,753,200.

         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.

         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 hydrogen in a safe and cost
effective manner. The technology will need to go through extensive safety

                                       9
<PAGE>

testing and will have to meet various government safety 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.

         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.

         On May 22, 2003, the Company changed its name to Alternate Energy Corp.
and commenced active business operations on June 1, 2003. The Company has been
working on a strategy to raise capital in order to continue its efforts to
complete certification of the Company's Hydrogen Production System as well as to
develop its Alpha products.

         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.

                                       10
<PAGE>

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.

         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. Senior trial counsel has recommended to the Commission
that they settle with the Company and that they not impose any civil penalty. As
part of Counsel's recommendation the Company would neither admit nor deny any
liability. The Commission has not yet approved the recommendation.

                                       11
<PAGE>

ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS

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. The
shares and warrants have subsequently been registered on Form SB-2 which was
declared effective by the Commission on April 1, 2004.

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 MARCH 31, 2004.

                                       12
<PAGE>

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 14 TH DAY OF MAY, 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

                                       13
<PAGE>

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

                         I, Blaine Froats, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of AEC. (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

                                       14
<PAGE>

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: May 14, 2004

                                       15
<PAGE>

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

                        I, BLAINE FROATS, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of AEC. (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

                                       16
<PAGE>

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/ BLAINE FROATS
                          ----------------------------------
                          BLAINE FROATS
                          CFO

Date: May 14, 2004

                                       17