<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 SEPTEMBER 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 September 30, 2003
was 113,806,877 Shares.

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


                                       1
<PAGE>
<TABLE>

ALTERNATE ENERGY CORP.
CONDENSED BALANCE SHEET
                                                       Sept 30            Dec 31
Unaudited                                                2003              2002
------------------------------------------------------------------------------------

<S>                                                 <C>                <C>
Assets                                                                 $         --
Bank                                                      12,287
Prepaid Expenses                                       2,017,832
Patents and Technology                                 4,153,650
                                                    -------------      -------------

                                                       6,183,769                  0
                                                    =============      =============

LIABILITIES
Current
      Accounts payable and accrued liabilities      $     56,752       $    202,000
Loan to Related Party
Loan to Related Party                                    209,533

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

                                                         266,285            202,000

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


SHAREHOLDERS' EQUITY
Capital stock (Note 2)                                   129,701             13,181
Additional paid in capital                            17,378,289         10,503,691
Deficit                                              -11,526,387        (10,718,872)

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

                                                       5,981,603           (202,000)

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

                                                       6,247,888       $          0

                                                    =============      =============
</TABLE>


See accompanying notes to the financial statements.

                                       2
<PAGE>
<TABLE>

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

<CAPTION>

                                       September          September       9 months ended       9 months ended
Three months ending Sept 30               2003              2002               2003                 2002

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

<S>                                 <C>                 <C>                 <C>                 <C>
Revenue                             $          --       $          --       $          --       $          --

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

Expenses
         Management fees                  120,000              30,000             120,000              90,000
         Professional fees                  5,635                                   9,660              48,500
         Consulting                                            97,656                   0             559,306
         Administrative                   681,880              64,841           2,667,116             184,757
         Goodwill amortization                                 10,407                   0              31,221
                                    --------------      --------------      --------------      --------------
                                          807,515             202,904           2,796,776             913,784
                                    --------------      --------------      --------------      --------------

Net earnings (loss)                      (807,515)           (202,904)         (2,796,776)           (913,784)
                                    ==============      ==============      ==============      ==============

Basic Net loss per share                    -0.01               -0.04               -0.04               -0.17

Weighted basic average shares         113,806,877         140,375,992          79,128,850           4,641,834

                                    ==============      ==============      ==============      ==============
</TABLE>

See accompanying notes to the financial statements.


                                                           3
<PAGE>
<TABLE>

ALTERNATE ENERGY CORP.
CONDENSED STATEMENT OF CASH FLOW
(Unaudited)

<CAPTION>


                                                              September   9 months ended September
Three months ending Sept 30                                     2003               2002

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

<S>                                                         <C>               <C>
Cash flows from (applied to)

Operating
             Net earnings (loss)                               (807,515)         (913,784)
             Goodwill amortization                                   --            31,221
             Shares issued for Services
             Loss on Sales of Investments                                         456,250
Changes in
             Accounts payable and accrued liabilities           -56,593            40,215
                                                            ------------      ------------

                                                               (864,108)         (386,098)

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

Investing
             Purchase of Patents and Technology              -4,090,787




Financing
             Loan Payable                                       209,433            32,800
             Due to Directors                                                     (34,959)
             Issuance of shares                               6,632,310           385,500
                                                            ------------      ------------

                                                              6,841,743           383,341
                                                            ------------      ------------


Net increase (decrease) in cash during the period             1,886,848            -2,757

Cash beginning of period                                                           39,525

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

Cash end of period                                          $    12,287       $     2,528

                                                            ------------      ------------
</TABLE>

See accompanying notes to the financial statements.


                                                 4
<PAGE>


ALTERNATE ENERGY CORPORATION, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(Unaudited) September 30, 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 September 30, 2003 to purchase 4,241,136
shares of common stock, June 30, 2003-4,241,136.

Basic weighted average shares outstanding September 30, 2003 were 113,806,877.
June 30, 2003 - 110,399,377

                                       5
<PAGE>

2. CAPITAL STOCK

There were 11,265,000 shares issued for this period. These shares were issued
for the purchase of the hydrogen production technology as well as for payment
for consulting services for a number of executives and professional people.


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 September 30, 2003, 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 prototype units for the 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
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 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 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 homes and 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 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 8 full time employees. In conjunction with the production of
prototype units it is anticipated that the Company will have a total of 12 full
time employees at the end of 12 months.

SALES

No sales occurred in the quarter ending September 30, 2003, as the company has
been involved with the installation of new lab facilities and are currently
building and testing the prototype units for the hydrogen production system.

COSTS AND EXPENSES

Expenses for the quarter ending September 30, 2003 were $807,515, compared to
$202,904 for the same period of 2002. The increase was contributed to the
beginning stages of operations for the implementation of the hydrogen production
system, as well as the cost of the increased administration processes involved
in the progress of the technology.


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.

                                       7
<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 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/A has been filed with the SEC on Aug 28, 2003


                                       8
<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 14TH DAY OF NOVEMBER, 2003


                       ALTERNATE ENERGY CORPORATION, INC.


                       BY: /S/ BLAINE FROATS

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




                                       9
<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, 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: November 14, 2003



                                       10
<PAGE>

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

                        I, Jack Wasserman, 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/ JACK WASSERMAN

             - - - -- - -- - - - -- -
             JACK WASSERMAN
             TREASURER
          Date: November 14, 2003




                                       11