UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2009
	FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2009
OR
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number ~~333~~000-~~153858~~53836

ALTERNATIVE ENERGY DEVELOPMENT CORPORATION

(Formerly Terrasol Holdings Ltd.)

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

17505 N 79th Ave

Suite #309

Glendale, Arizona 85308

(Address of principal executive offices, including zip code.)

(623) 776-3200

(Registrant’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.

YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [ ] Accelerated Filer [ ]

Non-accelerated Filer [ ] Smaller Reporting Company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [X] NO [ ]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 6566,800,000 as of ~~June~~December 1921, 2009.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(~~A Development~~An Exploration Stage Company)

~~April~~October 3031, 2009

Index

FINANCIAL STATEMENTS

Balance Sheets ............................................................................................................................~~................~~F–1

Statements of Operations ..........................................................................................................~~................~~F–2

Statements of Stockholders’ Equity (Deficiency) ..................................................................~~................~~F–3

Statements of Cash Flows .........................................................................................................~~................~~F–4

NOTES TO THE FINANCIAL STATEMENTS ......................................................................~~................~~F–5

-2-

Alternative Energy Development Corporation
(formerly Terrasol Holdings Ltd.)
(A Development Stage Company)
Balance Sheets
(Expressed in US Dollars)
	April 30,			July 31,
	October 31,			July 31,
	2009			~~2008~~2009
	(Unaudited)			(Audited)
ASSETS
Current Assets
Cash	$	~~546~~35,025		$	346,~~096~~256
Prepaid expenses		232,~~783~~846			~~205~~-
Total current assets		367,~~329~~871			346,~~301~~256
Mineral property acquisition costs		-			5,500
License agreement costs, net of accumulated amortization of $10,634 (July 31, 2009 - $5,402)		389,366			394,598
License agreement costs, net of accumulated amortization of $171 (Note 4)		399,829			-
Total Assets	$	457,237		$	400,854
Total Assets	$	403,158		$	39,801
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities
Accounts payable and accrued liabilities	$	7110,~~041~~393		$	833,~~500~~219
Due to related parties		5,184			125
Unearned revenue		1,997			-
Class A Convertible Preferred Stock due Assignor of license agreement (Note 4)		400,000			-
Due to related party		362,963			167,805
Total current liabilities		412,225			8,625
Class A Convertible Preferred Stock due Assignor of license agreement (Note 3)		400,000			400,000
Common Stock due Licensor of license agreement (Note 3)		-			10,000
Total current liabilities		875,353			611,024
Stockholders' Equity (Deficiency)
Preferred Stock, $0.00001 par value;
authorized 100,000,000 shares, none issued and outstanding		-			-
Common Stock, $0.00001 par value;
authorized 200,000,000 shares,
issued and outstanding 65,800,000 shares (July 31, 2008 - 72,800,000 shares) (Note 7)		658			728
issued and outstanding 66,800,000 shares (July 31, 2009 - 65,800,000 shares) (Note 6)		668			658
Additional paid-in capital		5262,~~642~~632			4952,~~872~~642
Deficit accumulated during the development stage		(62481,~~367~~416	)		(19263,~~424~~470	)
Total stockholders' equity (deficiency)		(9418,~~067~~116	)		31(210,~~176~~170	)
Total Liabilities and Stockholders' Equity (Deficiency)	$	~~403~~457,~~158~~237		$	39400,~~801~~854

See notes to financial statements

F-1

-3-

Alternative Energy Development Corporation
(formerly Terrasol Holdings Ltd.)
(A Development Stage Company)
Statements of Operations
(Expressed in US Dollars)
(Unaudited)
	Three months ended April 30, 2009			Nine months ended April 30, 2009			Cumulative during the exploration stage (June 2, 2008 to April 30, 2009)
	Three months ended October 31, 2009			Three months ended October 31, 2008			Cumulative from June 2, 2008 (inception) to October 31, 2009
Revenue	$	-		$	-		$	-309
Total Revenue		-			-			-309
Costs and expenses
General and administrative		8,099			34,277			50,101
Cost of sales		-			-			51
Donated services		900			2,700			3,300
General and administrative		156,060			10,165			371,342
Selling and marketing		25,926			-			40,925
Research and development		26,499			-			42,449
Interest expense		4,229			-			4,229
Donated services		-			900			3,300
Impairment of mineral property acquisition costs		-			5,500			5,500
Exploration costs		-			295			3,295
Amortization of license agreement costs (Note 4)		171			171			171
Amortization of license agreement costs (Note 3)		5,232			-			10,634
Total Costs and Expenses		9217,~~170~~946			4216,~~943~~860			62481,~~367~~725
Net Loss	$	(9217,~~170~~946	)	$	(4216,~~943~~860	)	$	(62481,~~367~~416	)
Net loss per share
Basic and diluted	$	(0.00	)	$	(0.00	)
Number of common shares used to compute net loss per share
Basic and Diluted		7266,~~249~~420,000			72,~~621~~800,000

See notes to financial statements

F-2

-4-

Alternative Energy Development Corporation
(formerly Terrasol Holdings Ltd.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficiency)
For the Period June 2, 2008 (Inception) to April 30, 2009
For the Period June 2, 2008 (Inception) to October 31, 2009
(Expressed in US Dollars)
(Unaudited)
	Common Stock, $0.00001 par value						Additional Paid-in		Deficit Accumulated During the Development
	Shares			Amount			Capital		Stage			Total
Sale of Common stock:
- June 4, 2008 at $0.00014		42,000,000		$	420		$	5,580	$	-		$	6,000
- July 18, 2008 at $0.00143		30,800,000			308			43,692		-			44,000
Donated services		-			-			600		-			600
Net Loss		-			-			-		(19,424	)		(19,424	)
Balance - July 31, 2008		72,800,000			728			49,872		(19,424	)		31,176
Cancellation of Common stock on April 23, 2009		(7,000,000	)		(70	)		70		-			-
Donated services		-			-			2,700		-			2,700
Net Loss		-			-			-		(42244,~~943~~046	)		(42244,~~943~~046	)
Balance - April 30, 2009		65,800,000		$	658		$	52,642	$	(62,367	)	$	(9,067	)
Balance – July 31, 2009		65,800,000			658			52,642		(263,470	)		(210,170	)
Unaudited:
Issuance of common stock to Licensor of license agreement		1,000,000			10			9,900		-			10,000
Net Loss		-			-			-		(217,946	)		(217,946	)
Balance – October 31, 2009		66,800,000		$	668		$	62,632	$	(481,416	)	$	(418,116	)

See notes to financial statements

F-3

-5-

Alternative Energy Development Corporation
(formerly Terrasol Holdings Ltd.)
(A Development Stage Company)
Statements of Cash Flows
(Expressed in US Dollars)
(Unaudited)
	Nine months ended April 30, 2009			Period from June 2, 2008 (Inception) to April 30, 2009
Cash Flows from Operating Activities
Net loss	$	(42,943	)	$	(62,367	)
Adjustments to reconcile net loss to net cash used for operating activities:
Donated services		2,700			3,300
Impairment of mineral property acquisition costs		5,500			5,500
Amortization of license agreement costs		171			171
Change in operating assets and liabilities:
Prepaid expenses		(2,578	)		(2,783	)
Accounts payable and acrrued liabilities		(1,459	)		7,041
Net cash used for operating activities		(38,609	)		(49,138	)
Cash Flows from Investing Activities
Mineral property acquisition costs		-			(5,500	)
Net cash used for investing activities		-			(5,500	)
Cash Flows from Financing Activities
Increase in due to related parties		5,059			5,184
Proceeds from sales of common stock		-			50,000
Net cash provided by financing activities		5,059			55,184
(Decrease) increase in cash		(33,550	)		546
Cash - beginning of period		34,096			-
Cash - end of period	$	546		$	546
Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-
Non-cash Investing and Financing Transactions:
Acquisition of license agreement in exchange for Class A Convertible Preferred Stock	$	400,000		$	400,000

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(A Development Stage Company)

Statements of Cash Flows

(Expressed in US Dollars)

(Unaudited)

	Three months ended October 31, 2009			Three months ended October 31, 2008			Period from June 2, 2008 (Inception) to October 31, 2009
Cash Flows from Operating Activities
Net loss	$	(217,946	)	$	(16,860	)	$	(481,416	)
Adjustments to reconcile net loss to net cash used for operating activities:
Stock-based compensation		-
Donated services		-			900			3,300
Impairment of mineral property acquisition costs		-			5,500			5,500
Amortization of license agreement costs		5,232						10,634
Change in operating assets and liabilities:
Prepaid expenses		(32,846	)		(581	)		(32,846	)
Unearned revenue		1,997			-			1,997
Accounts payable and accrued liabilities		77,174			(8,426	)		110,393
Net cash used for operating activities		(166,389	)		(19,467	)		(372,438	)

Cash Flows from Investing Activities
Mineral property acquisition costs		-			-			(5,500	)
Net cash used for investing activities		-			-			(5,500	)

Cash Flows from Financing Activities
Increase in due to related parties		195,158			-			362,963
Proceeds from sales of common stock		-			-			50,000
Net cash provided by financing activities		195,158			-			412,963

(Decrease) increase in cash		28,769			(19,467	)		35,025

Cash - beginning of period		6,256			34,096			-

Cash - end of period	$	35,025		$	14,629		$	35,025
Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-		$	-
Income taxes paid	$	-		$	-		$	-

Non-cash Investing and Financing Transactions:
Acquisition of license agreement in exchange for Class A Convertible Preferred Stock	$	-		$	-		$	400,000

See notes to financial statements

F-4

-6-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(~~A Development~~ An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

~~April~~October 3031, 2009

(Unaudited)

Note 1. Organization and Business Operations

Terrasol Holdings Ltd. (the “Company”) was incorporated in the State of Nevada on June 2, 2008 and changed its name to Alternative Energy Development Corporation on May 4, 2009. From inception to April 28, 2009, the Company’s principal business was the acquisition and exploration of mineral resources. On April 28, 2009 (see Note 43), the Company acquired rights to a certain Technology License and Distribution Agreement dated August 1, 2008 (the “Technology Agreement”) and to a certain Exclusive Manufacturing Agreement dated August 1, 2008 (the “Manufacturing Agreement”) and a change in control of the Company occurred. The Company plans to develop the related technology and manufacture products to reduce fuel use.

On May 5, ~~2009~~ ~~(see Note 9)~~2009, the Company effected a 7 for 1 forward stock split, increasing the issued and outstanding shares of common stock from 9,400,000 shares to 65,800,000 shares. All share amounts in these financial statements have been retroactively adjusted for all periods presented to reflect this stock split.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated any revenue since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at ~~April~~October 3031, 2009, the Company had cash of $~~546~~35,025 and has accumulated losses of $62481,~~367~~416 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

F-5

-7-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(~~A Development~~ An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

~~April~~October 3031, 2009

(Unaudited)

Note 2. Summary of Significant Accounting Policies

a)	Interim Financial Information

The unaudited financial statements as of ~~April~~October 3031, 2009 and for the three ~~and nine~~ months ~~then~~ ended ~~and~~October ~~for~~31, ~~the~~2009 ~~period~~and ~~June 2,~~ 2008 ~~(inception) to April 30, 2009~~ have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of ~~April~~October 3031, 2009 and the results of operations and cash flows for the periods ~~then~~ ended October 31, 2009 and 2008. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three ~~and~~months ~~nine month periods~~ ended ~~April 30~~October 31, 2009 isare not necessarily indicative of the results to be expected for any subsequent quarter of the entire year ending July 31, ~~2009~~2010. The balance sheet at July 31, ~~2008~~2009 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the ~~period~~twelve ~~June~~months 2,ended ~~2008 (inception) to~~ July 31, ~~2008~~2009 as included in our Form S10-~~1/A-2~~K filed with the Securities and Exchange Commission on November 2113, ~~2008~~2009.

b)	Financial Instruments and Fair Value Measures

~~Statement of Financial~~ Accounting Standards Codification (“~~SFAS~~ASC”) ~~No.~~section ~~157~~820, “Fair Value Measurements”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ~~SFAS~~ASC ~~No.~~820 ~~157~~ establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ~~SFAS No.~~ASC ~~157~~820 prioritizes the inputs into three levels that may be used to measure fair value:

F-6

-8-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(~~A Development~~ An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

~~April~~October 3031, 2009

(Unaudited)

Note 2. Summary of Significant Accounting Policies (continued)

b) Financial Instruments and Fair Value Measures (continued)

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Financial instruments consist principally of cash, accounts payable and amounts due to related parties. Pursuant to ~~SFAS~~ASC ~~No. 157~~820, the fair value of cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all of other financial ~~instruments~~ instruments approximate their current fair values because of their nature and respective maturity dates or durations.

c)	Reclassifications

Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

~~Note 3~~. ~~Mineral Property~~

In June 2008, the Company acquired a 100% interest in the Terrasol Lode Claim located in Clark County, Nevada at a cost of $5,500. At April 30, 2009, the Company recognized an impairment loss of $5,500 as it had not been determined whether there were proven or probable reserves on the property. During the nine months ended April 30, 2009, the Company paid $295 in maintenance fees.

F-7

-9-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(~~A Development~~ An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

~~April~~October 3031, 2009

(Unaudited)

Note 4 3. License Agreement Costs, Net

License agreement costs, net, ~~at April 30, 2009~~ consists of:

Class A Convertible Preferred Stock due Licensor		$	400,000
	October 31, 2009			July 31, 2009
Less accumulated amortization			(171)
Class A Convertible Preferred Stock due Licensor	$	400,000			400,000
License agreement costs, net		$	399,829
Less accumulated amortization		(10,634	)		(5,402	)
License agreement costs, net	$	389,366			394,598

On April 28, 2009, the Company entered into two Assignment Agreements to acquire the right, title and interest to a technology license and distribution agreement (the “Technology Agreement”) and to an exclusive manufacturing agreement (the “Manufacturing Agreement”) in consideration for 2,000,000 shares of Class A Convertible Preferred Stock (see Note 65) and a $10 royalty obligation to Assignor for each unit sold. The stated purchase price in the Assignment Agreement is $1,220,000 payable in the form of 2,000,000 shares of the Company’s Class A Convertible Preferred Stock. However, the Company recorded the acquisition at the $400,000 estimated fair value of the 2,000,000 shares of Class A Convertible Preferred Stock at April 28, 2009.

The Company recorded amortization expense of $~~171~~5,232 for the ~~period~~three ~~April~~months 28ended October 31, 2009 compared to ~~April~~ 30$0 in the three months ended October 31, ~~2009~~2008 (using the straight line method over the remaining term, including option terms, of the Technology Agreement (approximately 19.25 years)).

Pursuant to the Technology Agreement, the Company has the exclusive rights to manufacture, sell and distribute products embodied in United States Patent No. 7117859 until August 1, 2013. The Company has three options to extend the term by 5 years per option upon the same terms and conditions as the initial term. In the original terms ~~The~~of ~~Company~~the ~~also~~Technology ~~has~~Agreement, the Company had a $40 royalty obligation to Fuel Concepts LLC (the initial ~~licensor~~ licensor) for each unit sold over 6,000 units per year. On June 18, 2009, an amendment to the Technology Agreement was signed which provides for the $40 royalty obligation on all units sold (not on only those over 6,000 units per year) commencing in the second year of the agreement. Also, the amendment provides for the delivery of 1,000,000 shares of Company common stock to Fuel Concepts LLC. The Company has included the $10,000 estimated fair value of the shares at June 18, 2009 in general and administrative expenses.

Pursuant to the Manufacturing Agreement, Fuel Concepts LLC has the exclusive world-wide non-assignable right to manufacture products for the Company at a specified price per unit for 5 years.

F-8

-10-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(~~A Development~~ An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

~~April~~October 3031, 2009

(Unaudited)

Note 5 4. Related Party Transactions

On June 4, 2008, the Company issued 6,000,000 (42,000,000 post forward stock split) shares of common stock at $0.001 per share to the then president of the Company for cash proceeds of $6,000. On April 23, 2009, 1,000,000 (7,000,000 post forward stock split) shares were returned to the Company and cancelled.

AsOn ~~at April~~July 3031, 2009, the Company isgranted ~~indebted~~a promissory note to the ~~former~~controlling ~~president~~stockholder of the Company ~~for~~ in the amount of $~~184~~167,805. (The promissory note carries a simple interest rate of 10% and is due in full, principal and interest, on July 3130, ~~2008~~2010. The -promissory note was issued in consideration of the stockholder’s payments of advances to the Company ($~~125~~62,300), ~~for~~costs ~~expenses~~incurred ~~paid~~prior onto ~~behalf~~the Company’s acquisition of the ~~Company. This~~Technology ~~amount~~Agreement isand ~~non-interest~~Manufacturing ~~bearing~~Agreement ($100,455), ~~unsecured~~and costs incurred subsequent to the Company’s acquisition of the Technology Agreement and ~~due~~Manufacturing onAgreement ~~demand~~($5,050).

As at ~~April~~ 30October 31, 2009, the Company is indebted to the Assignor and controlling stockholder of the Company for a total of $5362,~~000~~963 (July 31, ~~2008~~2009 - $0167,805). $167,805 ~~for~~is ~~expenses~~secured ~~paid~~by the above promissory note executed on ~~behalf~~ ofJuly ~~the~~31, ~~Company.~~2009 ~~This~~and ~~amount~~the remainder, $195,158, is non-interest bearing, unsecured and due on demand.

~~The Company~~Note ~~received services from its former president at no cost to the Company~~5. ~~For~~ Preferred accounting purposes, the estimated fair value of these donated services ($300 per month for the services) is included in the statements of operations as an expense and additional paid-in capital is increased by the same amounts. For the nine months ended April 30, 2009, the Company expensed $2,700 in donated services.Stock

Note 6. Preferred Stock

The preferred stock may be divided into and issued in series. The Board of Directors of the Company is authorized to divide the authorized shares of preferred stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

On May 4, 2009, the Company designated 20,000,000 shares of its preferred stock as Class A Convertible Preferred Stock (“Class A Stock”). Each share of Class A Stock is convertible into 20 shares of common stock, has 100 votes, has no dividend rights except as may be declared by the Board of Directors, and has a liquidation preference of $1.00 per share.

On December 2, 2009, the Company caused the transfer agent to deliver 2,000,000 shares of its Class A Stock to its controlling stockholder pursuant to the Assignment of the Technology License and Distribution Agreement dated April 28, 2009 (see Note 7 3). ~~Common Stock~~

OnNote ~~June 4, 2008, the Company issued~~ 6~~,000,000 (42,000,000 post forward stock split) shares of common stock at $0~~.~~001~~ Common ~~per share to the president of the Company for cash proceeds of $6,000.~~Stock

On ~~July 18~~June 4, 2008, the Company issued ~~a total of 4~~6,~~400~~000,000 (3042,~~800~~000,000 post forward stock split) shares of common stock ~~to 44 investors~~ at $0.01001 per share to the then president of the Company for cash proceeds of $446,000.

F-9

-11-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(~~A Development~~ An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

~~April~~October 3031, 2009

(Unaudited)

Note 7 6. Common Stock (continued)

On July 18, 2008, the Company issued a total of 4,400,000 (30,800,000 post forward stock split) shares of common stock to 44 investors at $0.01 per share for cash proceeds of $44,000.

On November 25, 2008, the Securities and Exchange Commission declared effective the Company’s registration statement to register 4,400,000 (30,800,000 post forward stock split) shares of common stock held by certain stockholders (the “selling stockholders”) of the Company. The Company will not receive any proceeds from any sales of such shares.

On April 23, 2009, the former president of the Company returned 1,000,000 (7,000,000 post forward stock split) shares to the Company and these shares were cancelled.

AtOn ~~April 30~~September 4, 2009, the Company ~~had~~issued noFuel Concepts, LLC 1,000,000 shares of common stock ~~option~~pursuant ~~plan~~to an amendment dated June 18, 2009 to the Technology License and ~~there~~Distribution ~~were~~Agreement nodated ~~options~~August ~~or warrants~~1, ~~outstanding~~2008 and to a certain Exclusive Manufacturing Agreement dated August 1, 2008 (see Note 3).

~~Note 8~~At October 31, 2009, the Company had no stock option plan and there were no options or warrants outstanding. ~~Income Taxes~~

Note 7. Income Taxes

The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate of 35% to income (loss) before income taxes. The sources of the difference follow:

		Nine Months Ended		Period June 2, 2008 (Inception) to
		Three Months Ended		Three Months Ended
		April 30, 2009		April 30, 2009
		October 31, 2009		October 31, 2008
Expected tax at 35%	$	(1576,~~030~~281)	$	(215,~~829~~901)
License agreement costs		601,831		60-
Donated services		~~945~~-		~~1,155~~315
Increase in valuation allowance		1474,~~025~~450		205,~~614~~586
Income tax provision	$	–	$	–

The significant components of the Company’s deferred income tax assets are as follows:

		April 30,		July 31,
		2009		2008
Net operating loss carry forward	$	20,614	$	6,588
Valuation allowance		(20,614)		(6,588)
Net deferred tax assets	$	–	$	–

F-10

-12-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(~~A Development~~ An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

~~April~~October 3031, 2009

(Unaudited)

Note 8 7. Income Taxes (continued)

~~Based~~The ~~on management’s~~significant ~~present~~components ~~assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset~~ of ~~$20,614 at April 30, 2009 attributable to~~ the ~~future utilization of the net operating loss carry-forward of $58,896 will be realized. Accordingly, the~~ Company’s ~~has provided a 100% allowance against the~~ deferred income tax ~~asset~~assets inare ~~the financial statements. The Company will continue to review this valuation allowance and make adjustments~~ as ~~appropriate.~~ ~~The net operating loss carry-forward expires $18,824 in 2029 and $40,072 in 2030.~~follows:

		October 31,		July 31,
		2009		2009

Net operating loss carry forward	$	163,619	$	89,169
Valuation allowance		(163,619)		(89,169)
Net deferred tax assets	$	–	$	–

Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $163,619 at October 31, 2009 attributable to the future utilization of the net operating loss carry-forward of $467,482 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements. The Company will continue to review this valuation allowance and make adjustments as appropriate. The net operating loss carry-forward expires $18,824 in 2028, $235,944 in 2029 and $212,714 in 2030.

Current United States income tax laws limit the amount of loss available to offset against future taxable income when a substantial change on ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

Note 9. Subsequent Events

a) On May 4, 2009, the Company amended the articles of incorporation and changed the name of the Company from Terrasol Holdings Ltd. to Alternative Energy Development Corporation and increased the authorized common stock from 100,000,000 shares to 200,000,000 shares. Also the Company designated 20,000,000 shares of its preferred stock as Class A Convertible Preferred Stock.

b) On May 5, 2009, the Company effected a forward stock split of its common stock in a ratio of seven (7) new shares for every one (1) existing share of common stock. As a result, the issued and outstanding share capital increased from 9,400,000 shares of common stock to 65,800,000 shares of common stock. All share amounts have been retroactively adjusted for all periods presented.

c) On May 5, 2009, the Company entered into an exclusive employment agreement with the new president and chief executive officer of the Company for a term of two years ending May 4, 2011. The president is to be paid $120,000 per annum, and is to receive 1,000,000 shares of common stock within 90 days (to vest evenly over the 2 years term).

d) On May 6, 2009, the Company issued 2,000,000 shares of Class A Convertible Preferred Stock to the Assignor as consideration for the Technology License and Distribution Agreement referred to in Note 4.

F-11

-13-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

October 31, 2009

(Unaudited)

Note 8. Commitments and Contingencies

Employment Agreement

On May 5, 2009, the Company entered into an exclusive employment agreement with its president and chief executive officer for a term of two years ending May 4, 2011. The agreement provides for annual compensation of $120,000 and the grant of 1,000,000 shares of Company common stock (500,000 shares to vest in May 2010 and 500,000 shares to vest in May 2011).

Advertising Agreement

On October 1, 2009, the Company entered into a $200,000 contract to buy advertising space and a “micro-site” on Oprah.com. The campaign, which is planned to run through February 28, 2010, required a $50,000 non-refundable down payment which has been paid. The campaign is for the purchase of a minimum of 18,641,750 “impressions” and a co-branded “micro-site” featuring AEDC’s core product, the e3 Fuel Saver. Various banner ads featuring the company and its product(s) as well as the micro-site are scheduled to run throughout the duration of the campaign. At October 31, 2009, the Company has incurred $25,476 of marketing expenses under the contract.

Litigation

On October 7, 2009, the Company filed a lawsuit, Alternative Energy Development Corporation v. Fuel Concepts, LLC, Smith Young and Associates, Cary Lee Peterson, Roy Martin, et al, CV2009-054477, in the Superior Court of the State of Arizona, in the County of Maricopa, against the Defendants alleging conspiracy by the Defendants to circumvent the Technology Licensing Agreement dated August 1, 2008 between Morton Weisbrot, Smith Young and Associates, and Fuel Concepts, LLC, interfering with the Company’s contractual and business relations, and misappropriation of the Company’s website, trade secrets, and other confidential information. The Company is seeking injunctive relief and monetary damages related to its claims. On November 3, 2009, the Superior Court issued a Preliminary Injunction against Defendants Fuel Concepts, LLC, Smith Young and Associates, and Roy Martin. On December 1, 2009, the Superior Court issued a limited injunction against Defendant Rashad Patrick.

F-12

-14-

Alternative Energy Development Corporation

(formerly Terrasol Holdings Ltd.)

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

October 31, 2009

(Unaudited)

Note 9. Subsequent Events

On November 10, 2009, the Company entered into an exclusive employment agreement with its chief financial officer and director for a term of two years ending November 9, 2011. The agreement provides for a $10,000 signing bonus, annual compensation of $120,000 and the grant of 1,000,000 shares of Company common stock (all to vest in November 2010).

On December 1, 2009, the Company and its CEO filed for a certain patent application, 12/628,378 titled Fuel Vaporizing Device for Motor Vehicles and Method Therefore relating to its second generation fuel saving device, the e3 Fuel Saver Pro. Additionally, the Company received an assignment and agreement from its CEO for the rights, title and interest for the same patent for good and valuable consideration.

c)	On December 2, 2009, the Company caused the transfer agent to deliver 2,000,000 shares of its Class A Convertible Preferred Stock to its controlling stockholder pursuant to the Assignment of the Technology License and Distribution Agreement dated April 28, 2009 (see Note 3).

d)	The Company has evaluated subsequent events through the filing date of this Form 10-Q and has determined that there were no additional subsequent events to recognize or disclose in these financial statements.

F-13

-15-

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

This section of the report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

WeAs of April 28, 2009, we are no longer in the mineral exploration business. We are now engaged in the business of designing, developing, manufacturing, marketing, and distributing cost-effective after-market fuel conservation technologies.

WeCurrently ~~are now~~our ~~engaged~~exclusive inproduct is the ~~business~~e3 ofFuel ~~designing,~~Saver ~~developing,~~7000. The e3 Fuel Saver 7000 is unique in that its operation is unlike any other fuel saving device. The fuel saver was originally engineered in 1995 by an Ohio company called Fuel Concepts and manufacturing, ~~marketing~~began in 2004. In October of 2006, the fuel saver 7000 was patented (US PATENT 7117859). With the combined efforts of Fuel Concepts and ~~distributing~~Alternative ~~cost-effective~~Energy ~~after-market~~Development Corporation (“AEDC”), production began and was completed creating a superior fuel ~~conservation technologies~~saving device, the e3 Fuel Saver 7000.

~~Currently our~~Fuel ~~exclusive~~saving ~~product~~devices iscurrently being marketed can only be compared to the e3 Fuel Saver 7000. ~~The~~by e3their ~~Fuel~~reference ~~Saver~~to ~~7000~~reducing ~~is unique~~fuel inconsumption. Their ~~that~~process ~~its~~to ~~operation~~create isthe ~~unlike~~end ~~any~~result ~~other~~verses ~~fuel~~AEDC’s ~~saving~~is ~~device~~completely different. ~~The~~AEDC ~~fuel saver~~has ~~was~~the ~~originally~~only ~~engineered~~device incurrently ~~1995~~using byvapor ancombustion ~~Ohio~~which ~~company~~decreases ~~called~~the ~~Fuel~~need ~~Concepts~~for gas to be ~~and~~used ~~manufacturing~~thus ~~began~~creating the reduction in ~~2004~~fuel usage. InUnlike ~~October~~systems ofthat ~~2006~~use hydrogen or magnetic fields, the ~~fuel~~e3 ~~saver~~Fuel Saver 7000 ~~was patented~~uses ~~(US~~combustion ~~PATENT~~to ~~7117859)~~minimize a vehicles consumption of fuel. ~~With~~E3's ~~the~~3-Stage ~~combined~~Cold ~~efforts~~Vapor ofSystem ~~Fuel~~can ~~Concepts~~convert any carbureted and ~~AEDC,~~ ~~production~~fuel ~~began~~injected ~~and~~gasoline ~~was~~based ~~completed~~automobile ~~creating~~in ato ~~superior~~an extremely efficient, fuel saving ~~device~~machine. Normally, vehicles without the e3 Fuel Saver 7000 system installed rely on the injectors in order to create combustion. Unfortunately, the result is extremely inefficient. For every amount of fuel that is sprayed into each cylinder less than 30% is actually used to fire the cylinder and the rest is wasted into our environment.

Fuel saving devices currently being marketed can only be compared to the e3 Fuel Saver 7000 by their reference to reducing fuel consumption. Their process to create the end result verses AEDC’s is completely different. AEDC has the only device currently using vapor combustion which decreases the need for gas to be used thus creating the reduction in fuel usage. Unlike systems that use hydrogen or magnetic fields, the e3 Fuel Saver 7000 uses combustion to minimize a vehicles consumption of fuel. E3's 3-Stage Cold Vapor System can convert any gasoline based automobile in to a extremely efficient, fuel saving machine. Normally, vehicles without the e3 Fuel Saver 7000 system installed rely on the injectors job is to atomize the fuel into the cylinder in order to create combustion. Unfortunately, the result is extremely inefficient. For every amount of fuel that is sprayed into each cylinder... less than 30% is actually used to fire the cylinder...the rest is wasted into the our environment.

The e3 Fuel Saver 7000 canister creates vapor, which is comparable to atomizing the fuel, and the car interprets the message that less fuel is needed while still maintaining the factory’s required air to fuel ratio. The result is less dependence on fuel with significantly fewer emissions. In extensive road testing conducted in the US and Australia, the e3 Fuel Saver system has been shown to significantly increase fuel mileage and reduce emissions. The e3 Fuel Saver has reported gas mileage increases between 20% - 50%. The average gas mileage boost for vehicles using e3's patented fuel system is over 30% on the highway.

-16-

On July 8, 2009 the company entered into a Dealer Agreement with Bennett Wholesale LLC of Colombia South Carolina to serve as Non-Exclusive reseller of the Company’s e3 Fuel Saver Product throughout South Carolina, North Carolina and Georgia. The Agreement has a term of five (5) years and calls for Bennett to purchase from the Company a minimum of 5,000 e3 Fuel Saver units during the first twenty four months of the term, following the shipment and delivery of initial fifty (50) units. As of October 31, 2009, Bennett Wholesale LLC has failed to perform it obligations under the Non-Exclusive Dealer Agreement it signed with the Company on July 8, 2009. The Company believes this breech is a direct result of the intentional interference perpetrated by Fuel Concepts, LLC, Smith Young and Associates, Roy Martin, Rashad Patrick and Attorney Warren Markowitz. As a result of this interference, On October 7, 2009, the Company filed a lawsuit, Alternative Energy Development Corporation v. Fuel Concepts, LLC, Smith Young and Associates, Cary Lee Peterson, Roy Martin, et al, CV2009-054477, in the Superior Court of the State of Arizona, in the County of Maricopa, against the Defendants alleging conspiracy by the Defendants to circumvent the Technology Licensing Agreement dated August 1, 2008 between Morton Weisbrot, Smith Young and Associates, and Fuel Concepts, LLC, interfering with the Company’s contractual and business relations, and misappropriation of the Company’s website, trade secrets, and other confidential information. The Company is seeking injunctive relief and monetary damages related to its claims. On November 3, 2009, the Superior Court issued a Preliminary Injunction against Defendants Fuel Concepts, LLC, Smith Young and Associates, and Roy Martin. On December 1, 2009, the Superior Court issued a limited injunction against Defendant Rashad Patrick.

On July 14, 2009 the company entered into a binding Letter of Intent with Potts Advertising of Fort Lauderdale, Florida to be the Exclusive Marketing Agent for product sales to automobile dealers within North America. The Agreement calls for Potts to provide up to 835 dealer/ resellers by the end of June 2010. As of October 31, 2009, Potts Advertising has failed to perform it obligations under the binding letter of intent it signed with the Company on July 14, 2009. The Company believes this breech is a direct result of the intentional interference perpetrated by Fuel Concepts, LLC, Smith Young and Associates, Roy Martin, Rashad Patrick and Attorney Warren Markowitz. As a result of this interference, On October 7, 2009, the Company filed a lawsuit, Alternative Energy Development Corporation v. Fuel Concepts, LLC, Smith Young and Associates, Cary Lee Peterson, Roy Martin, et al, CV2009-054477, in the Superior Court of the State of Arizona, in the County of Maricopa, against the Defendants alleging conspiracy by the Defendants to circumvent the Technology Licensing Agreement dated August 1, 2008 between Morton Weisbrot, Smith Young and Associates, and Fuel Concepts, LLC, interfering with the Company’s contractual and business relations, and misappropriation of the Company’s website, trade secrets, and other confidential information. The Company is seeking injunctive relief and monetary damages related to its claims. On November 3, 2009, the Superior Court issued a Preliminary Injunction against Defendants Fuel Concepts, LLC, Smith Young and Associates, and Roy Martin. On December 1, 2009, the Superior Court issued a limited injunction against Defendant Rashad Patrick.

On July 20, 2009 the company entered into a Dealer Agreement with Dandy Enterprises LLC of St. Paul Minnesota to serve as Non-Exclusive reseller of the Company’s e3 Fuel Saver Product throughout Minnesota. The Agreement has a term of five (5) years and calls for Dandy to purchase from the Company a minimum of 5,000 e3 Fuel Saver units during the first twenty four months of the term, following the shipment and delivery of initial fifty (50) units. As of October 31, 2009, Dandy Enterprises LLC has failed to perform it obligations under the Non-Exclusive Dealer Agreement it signed with the Company on July 20, 2009. The Company believes this breech is a direct result of the intentional interference perpetrated by Fuel Concepts, LLC, Smith Young and Associates, Roy Martin, Rashad Patrick and Attorney Warren Markowitz. As a result of this interference, On October 7, 2009, the Company filed a lawsuit, Alternative Energy Development Corporation v. Fuel Concepts, LLC, Smith Young and Associates, Cary Lee Peterson, Roy Martin, et al, CV2009-054477, in the Superior Court of the State of Arizona, in the County of Maricopa, against the Defendants alleging conspiracy by the Defendants to circumvent the Technology Licensing Agreement dated August 1, 2008 between Morton Weisbrot, Smith Young and Associates, and Fuel Concepts, LLC, interfering with the Company’s contractual and business relations, and misappropriation of the Company’s website, trade secrets, and other confidential information. The Company is seeking injunctive relief and monetary damages related to its claims. On November 3, 2009, the Superior Court issued a Preliminary Injunction against Defendants Fuel Concepts, LLC, Smith Young and Associates, and Roy Martin. On December 1, 2009, the Superior Court issued a limited injunction against Defendant Rashad Patrick.

-17-

On October 1, 2009 the Company entered into a $200,000 contract to buy advertising space and a "micro-site" on Oprah.com. The campaign, which is planned to run through February 28, 2010, required a $50,000 non-refundable down payment which has been paid. The campaign is for the purchase of a minimum of 18,641,750 "impressions" and a co-branded "micro-site" featuring AEDC's core product, the e3 Fuel Saver. Various banner ads featuring the company and its product(s) as well as the micro-site are scheduled to run through out the duration of the campaign. At October 31, 2009, the Company has incurred $25,476 of marketing expenses under the contract.

Performance Benefits

e3 Fuel Saver greatly enhances engine power and performance:

• 3 stage vapor based fuel saving system that gives the consumer a significant increase in gas mileage

• Boosts engine power and performance. Quicker pick up and acceleration in town and on the highway.

-14-

• Works on gasoline fuel injection or carburated engines for cars, trucks, vans, RV's, boats, motorcycles, race cars, and other performance vehicles.

• Constructed from top quality anodized T-6 aircraft aluminum and polishedbrass fittings for long lasting protection.

• Works in addition to all other gas savers.

• No moving parts.

• Can be uninstalled and moved to any other gasoline powered car, truck, van or motor home.

• Easily installed in about an hour.

AEDC’s approach is to the market our fuel conservation technology to consumers, business, and government agencies. There is a demand to protect our environment and the e3 Fuel Saver 7000 will provide a sizable contribution to the environment.

-18-

Our strategy for Consumer and Business to Business marketing is by advertising through National television, radio and internet commercials, fundraisers, and direct/indirect sales force teams.

Retail price is $300~~.00~~ USD. Wholesale is $~~195.00~~200 USD.

Cost of Good Sold (COGS)

Unit costs is $22.50.

Shipping fees are $2.50.

Technology license and distribution agreement royalty is $40.

Assignment and assumption royalty is $10.

Research and Development

The automotive industry is characterized by continuous technological change, requiring a continuous effort to enhance our existing product and develop new products and technologies. Our research and development expenditures in the first three months of fiscal 2010 totaled approximately $26,499. Research and development expenditures were primarily related to enhancements to our e3 Pro Fuel Saver device, similar next generation devices and the expansion of our intellectual property portfolio.

Manufacturing and Operations Plan

Location and space requirements

The corporate office is located in Glendale, AzAZ. This location will be the hub for all operations, sales, and marketing.

Manufacturing

The entire product’s manufacturing and assembled is currently located in Ningbo, China. The facility is capable of producing up to 50,000 units every 30 days. As the demand grows, the company has a secondary plant that will be an exclusive e3 Fuel Saver 7000 manufacturing plant to produce an additional 80,000 units a month.

~~-15-~~The Company is of the opinion that Fuel Concepts LLC is in breach of its Exclusive Manufacturing Agreement as assigned. As a result The Company has decided to move its entire product manufacturing and assembly from Ningbo, China to the US. Currently the Company is in the process of locating an appropriate facility within the United States.

Subcontractors and Suppliers

Our subcontractors will fall into two scenarios. First scenario will be to purchase our units for resale on a pricing structure determined by volume and footprint of targeted locations. Their commission is controlled by their own pricing adjustments in their direct sale. Subcontractor is accepting personal payment and liability from their customer.

sale. Subcontractor is accepting personal payment and liability from their customer.

The other scenario is that the subcontractor will purchase product on an “as needed” basis and payment is made for units directly to AEDC. Subcontractor receives a commission per unit. Subcontractor is accepting payments on behalf of AEDC.

-19-

Our dealer, distributer network consist of: Automotive dealerships and repair facilities as well as Retailers whose inventory tailor to after-market automotive products.

Warranty

The e3 Fuel saver 7000 has no movable parts which keeps potential repairs to a minimum. Proper installment (Install performed by a “Certified Installer) is what determines if a warranty replacement is valid. There is a standard 1 year manufacturer’s warranty.

Labor requirements

Our labor force will consist of direct sales team members, marketing representatives, operational staff, and call center representatives. The Company anticipates aan n executive and administrative staff of 10-15 employees over the twelve months.

Employees will be paid based upon position. All sales positions are 1099 contractors and are paid a commission per unit. Manufacturing Reps are also paid as sales people.

Marketing Plan

Target Audiences- include: City and State Municipalities, Government Agencies, Fleet, Taxi Cabs Companies, Limousine Companies, Rental Car Companies, Auto Dealers, TV / Radio, Retailers, Internet, Print Ads, Direct Mail Community Outreach Campaigns.

•Results ~~City and~~of ~~State Municipalities~~Operations

~~• Government~~Three ~~Agencies~~months ended October 31, 2009 compared to the three months ended October 31, 2008

•Revenues. Total Revenues during the three months ended October 31, 2009 were $0 compared to $0 for the three months ended October 31, 2009. The lack of revenue in the three months ended October 31, 2009 are due to management’s decision to change ~~Fleet~~its business operations from mineral exploration to business of designing, manufacturing, marketing and distributing cost-effective after market fuel conservation technologies and management’s focus on its ongoing litigation with the patent holder of its e3 fuel saver 7000 device and others.

–Cost ~~Taxi~~of Equipment and Services. Total Cost of Equipment and Services during the three months ended October 31, 2009 were $0 compared to $0 for the three months ended October 31, 2008. The lack of cost of equipment and services in the three months ~~Cabs~~ended October 31, 2009 are due to management’s decision to change its business operations from mineral exploration to business of designing, manufacturing, marketing and distributing cost-effective after market fuel conservation technologies and management’s focus on its ongoing litigation with the patent holder of its e3 fuel saver 7000 device and others.

–Research and Development Expenses. Total Research and Development during the three months ended October 31, 2009 were $26,499 compared to $0 for the three months ended October 31, 2008. The increase is primarily due to management’s ~~Limousine~~decision ~~Companies~~to change its business operations from mineral exploration to business of designing, manufacturing, marketing and distributing cost-effective after market fuel conservation technologies. Research and development expenditures were primarily related to enhancements to our e3 Pro Fuel Saver device, similar next generation devices and the expansion of our intellectual property portfolio.

~~– Rental Car Companies~~-20-

•Selling, General and Administrative Expenses. Total Selling, General and Administrative Expenses during the three months ended October 31, 2009 were $191,447 compared to $16,860 for the three months ended October 31, 2008. For the three months ended ~~Consumer~~October ~~(marketed~~31, 2009, the selling, general and administrative expenses were comprised of $66,767 for compensation related expenses, $25,926 for selling and marketing, $5,232 for amortization of licensing agreement, $4,229 for interest expense and $89,293 for general and administrative expenses. For the three months ended October 31, 2008, the selling, general and administrative expenses were comprised of $295 for exploration costs, $900 for donated services and $15,665 for general and administrative expenses. The increase is primarily due to bymanagement’s ~~various~~decision ~~segments)~~to change its business operations from mineral exploration to business of designing, manufacturing, marketing and distributing cost-effective after market fuel conservation technologies.

– Dealers

– TV / Radio

– Retailers

– Internet

– Print Ads

– Direct Mail

– Community Outreach

-16-

Milestones

The milestones for the next 12 months are as follows:

(1) Complete current orders for 27,000 units in the following foreign territories:

Australia

New Zealand

Guam

Panama

USA

South Africa

(2) Open a minimum of one major distributor for each of the following foreign territories:

Australia

New Zealand

Guam

Panama

USA

South Africa

(3) Increase present Dealer / installation Locations from 30 to 100 in the next 12 months

(4) Launch first US based national television advertising campaign

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are ~~effective~~effectve. There were no changes in our internal control over financial reporting during the quarter ended ~~April~~October 3031, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

-17-

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

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ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALE OF SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS.

The following documents are included herein:

Exhibit No.	Document Description
10.1	~~Technology~~Assignment ~~License~~ and ~~Distribution~~ Agreement ~~Amendment~~for patent application, 12/628,378 titled Fuel Vaporizing Device for Motor Vehicles and Method Therefore.
31.1	Certification of Principal Executive Officer ~~and Principal Financial Officer~~ pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer pursuant to section 906 of the Sarbanes-~~18-~~Oxley Act of 2002.

-22-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this ~~22nd~~ 21st day of ~~June~~December, 2009.

ALTERNATIVE ENERGY DEVELOPMENT CORPORATION BY: JERRY ALVAREZ Jerry Alvarez, President, Principal Executive Officer, ~~Principal Financial Officer~~ and a member of the Board of Directors. BY: SAM MESSINA III Sam Messina III, Principal Financial Officer.

-1923-

EXHIBIT INDEX

Exhibit No.	Document Description
10.1	~~Technology~~Assignment ~~License~~ and ~~Distribution~~ Agreement ~~Amendment~~for patent application, 12/628,378 titled Fuel Vaporizing Device for Motor Vehicles and Method Therefore.
31.1	Certification of Principal Executive Officer ~~and Principal Financial Officer~~ pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer pursuant to section 906 of the Sarbanes-~~20-~~Oxley Act of 2002.

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