Fred Barbara, Tom Volini Penny Stock Ethanol Company for sale

Alternative Energy Sources' option to buy land next to the proposed Mayor Green, Barbara-Volini dump has expired. This company has no money and no projects going anywhere. This company was formed to replace the original ethanol partners of Volini after they walked away from their deal with Volini. Alternative Energy Sources went public in summer of 2006 and traded as high as $2.91 per share and currently trades at 12 to 14 cents a share.

On January 1, 2008, Alternative Energy Sources, Inc.'s (the "Company") option to purchase land in Kankakee, Illinois expired. The option had been retained in order to provide land upon which an ethanol plant could be constructed. In connection with the lapse of the option, management concluded on January 1, 2008 that material charges for impairment to certain assets are required as a result. The total estimated charge related to these impaired assets is approximately $1.7 million and is expected to be recorded in the Company's fiscal 2007 financial results. These impaired assets include capitalized costs paid to maintain the option, pre-paid engineering and construction costs and permitting-related costs. The Company does not expect any future cash expenditures related to these estimated impairment charges.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.

On January 4, 2008, Mr. James L. Spigarelli resigned from the Board of Directors of the Company due to time demands as President and CEO of Midwest Research Institute limiting his ability to participate in board responsibilities at the Company.

The Barbara-Volini proposed ethanol company traded at a new low today of 12 cents a share.. See articles below on the history of this company. This location is a very flood prone area near Minnie Creek which is also the location of the proposed Mayor Green, Barbara-Volini garbage dump. Watch the Still Pictures & Video Of The 2005 Flood and the Video Of The 1957 Flood of this area. As a result the Illinois Department of Natural Resources is requiring a large relief channel to be dug before development can take place likely making the area economically unviable.

ALTERNATIVE ENERGY (OTC BB:AENS.OB)

Last Trade:0.12
Trade Time:10:36AM ET
Change: 0.02 (13.02%)
Prev Close:0.139
Open:0.139
Bid:0.12 x 5000
Ask:0.13 x 5000
1y Target Est:N/A

Day's Range:0.12 - 0.14
52wk Range:0.13 - 2.00
Volume:94,080
Avg Vol (3m):107,894
Market Cap:4.90M
P/E (ttm):N/A
EPS (ttm):-0.143
Div & Yield:N/A (N/A)

The Barbara-Volini proposed ethanol plant company hit another new low today closing at 15 cents per share. They went public last year and hit a high of $2.91 per share 9-25-06. They have been falling like a rock since they announced they have put the company up for sale because they have no money to fund any of their ethanol plant proposals including the one to be built next to their proposed City of kankakee Chicago regional garbage dump.

This location is a very flood prone area near Minnie Creek. Still Pictures & Video Of The 2005 Flood Video Of The 1957 Flood As a result the Illinois Department of Natural Resources is requiring a large relief channel to be dug before development can take place likely making the area economically unviable.

ALTERNATIVE ENERGY (OTC BB:AENS.OB)

Last Trade:	0.15
Trade Time:	3:05PM ET
Change:	0.02 (9.09%)
Prev Close:	0.17
Open:	0.17
Bid:	0.15 x 5000
Ask:	0.18 x 5000
1y Target Est:	N/A

Day's Range:	0.15 - 0.18
52wk Range:	0.16 - 2.00
Volume:	161,843
Avg Vol (3m):	99,845.3
Market Cap:	6.08M
P/E (ttm):	N/A
EPS (ttm):	N/A
Div & Yield:	N/A (N/A)

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Form 10QSB for ALTERNATIVE ENERGY SOURCES INC

14-Nov-2007

Quarterly Report

Item 2: Management's Discussion and Analysis and Plan of Operation

Overview

We are a development stage company that has been engaged in product development and pre-operational activities since its formation and have no operating history as a producer of ethanol. We have had no revenues since our inception. We are planning to engage in the business of constructing, owning and operating fuel grade ethanol plants in the Midwest corn-belt. The ethanol we plan to produce is intended to be used by refineries or blenders and ultimately blended with gasoline fuel for internal combustion engines. Additionally, we anticipate that the plants will be designed to produce dried distilled grains (DDGs), which are used in the manufacture of various animal feeds, and carbon dioxide.

We completed permitting for the Boone County, Iowa and Kankakee, Illinois plants in June 2007 and plan to open these plants for commercial production by the first half of 2009 (the "Plants") if we secure financing by no later than early 2008. Where the railroads support the loading of unit trains, we expect each plant to load a unit train of ethanol approximately every nine days, acting as a consistent pipeline to the end blender or refinery, and to load a unit train of DDGs approximately once a week. We received the permit on our third plant site in Greenville, Illinois; however, financing for this plant will be deferred until a second financing phase which we plan to commence after construction has begun of our first two plants. The Company has options on the land for the Plants that expire in January 2008. If the Company is unable to extend the options it would lose the right to purchase the land to construct the Plants. In addition, in order to extend the options the Company will need to secure additional financing and there can be no assurance that the Company will be successful in this endeavor.

We have earned no revenues to date and our current capital and other existing resources will be sufficient only to provide a limited amount of working capital. We will require significant additional capital within the next three months to implement our business plans and may be unable to obtain the additional capital.

Our business strategy and anticipated competitive advantage is to produce ethanol at a lower cost by using:

Biomass fired plants for distillation energy as compared to natural gas fired plants.

Significant economies of scale with identical plants each producing greater than 110 million gallons of ethanol per year.

Unit train economics whereby both ethanol and DDGs are shipped in unit trains with dedicated power compared to single car shipments.

Lower cost producer status by way of spreading more fixed costs over more gallons, using biomass, and operating the plant with similar labor requirements as a 50 million gallon plant.

Our ability to continue as a going concern is dependent upon obtaining the necessary financing to acquire, construct, or enter into other venture activities and generate profitable operations from our planned ethanol facilities in the future. Our financial statements as of and for the period ended September 30, 2007 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We expect to incur substantial expenditures to further our capital investment programs and our available cash and investments on hand will not be sufficient to satisfy our current obligations and meet our capital investment objectives.

To address our ability to continue as a going concern, we have been seeking additional capital through the sale and issuance of equity and debt financing. At this point, we have not been able to obtain this capital.

To complete construction and commence operation of our Plants we will need to raise approximately $730 million in new capital. This amount is intended to cover the cost of construction, capitalized interest during construction, pre-operating costs, financing and legal fees and the necessary working capital lines to operate the Plants and provide for risk management hedging activities. If we are unable to secure this financing we plan to pursue operating funds to continue our efforts to secure financing for the Plants. If we are unable to obtain these operating funds we may not be able to continue as a going concern.

The Company had no ethanol operations in the first three quarters of 2007, and therefore no material operating or capital expenditures for the period. General and administrative expenditures for the three and nine months ended September 30, 2007 totaled $881,253 and $3,613,909.

The Company anticipates a reduction in recurring operating cash uses to approximately $190,000 per month in the fourth quarter of 2007. The Company also anticipates no project development expenditures in the fourth quarter of 2007.

The Company's Board of Directors has formed a Special Committee comprised of W. Gordon Snyder and Douglas D. Wilner to explore and evaluate strategic alternatives aimed at enhancing shareholder value for the Company's non-management stockholders. Strategic alternatives being considered include a possible sale of the Company. The Special Committee has retained the investment banking firm of Christenberry Collet & Company, Inc. to provide independent financial advisory services and has engaged Stinson Morrison Hecker LLP as independent legal counsel. No strategic alternative will be pursued unless it is recommended by the Special Committee.

The Company and a privately-held company (the "Potential Acquiror") have entered into a letter agreement to provide financial assurances to the Potential Acquiror for the time and expense incurred in evaluating a possible purchase of the Company. Under the terms of the letter agreement, the Company is free to pursue any strategic transaction including the sale of the company to another acquiror but is required to pay the Potential Acquiror a fee of $500,000 (and reimburse its reasonable expenses up to $500,000) if, within one year, the Company enters into an agreement with respect to a change-of-control transaction with another acquiror. However, that fee would be payable only upon consummation of such a transaction.

The acquisition consideration currently being explored with the Potential Acquiror for the acquisition of shares held by non-management stockholders involves an election to receive either $0.50 per share in cash or a lower cash price per share, together with contingent consideration, the amount of which would be capped and would depend upon the future financial contribution which may be provided by certain assets of the Company. These exploratory discussions also contemplate that the Company's management stockholders would exchange their stock for stock of the Potential Acquiror based on the same valuation that would be used to determine the acquisition consideration for the non-management stockholders.

The Company has not entered into an agreement with the Potential Acquiror providing for the purchase of the Company. There is no assurance that the Company will enter into such an agreement and, if the Company does enter into such an agreement, no assurance can be given as to the amount or form of the consideration to be paid for the shares. There can also be no assurance regarding whether the Board will elect to pursue any other strategic alternatives it may consider, or that any such alternatives will be consummated. The Company does not intend to provide updates or make any further comment until the outcome of the process is determined or until there are significant developments.

Results of Operations

Operating Revenues

The Company is a development stage business engaged in product development and pre-operational activities and therefore has had no revenues since inception, including the nine months ended September 30, 2007.

Cost of Sales and Gross Profit

The Company is a development stage business engaged in product development and pre-operational activities and therefore has had no cost of sales or gross profit since inception, including the nine months ended September 30, 2007.

General and Administrative Expenses

The Company expended $6,179,856 since inception through September 30, 2007 consisting mostly of payroll, stock based compensation, investor relations, advertising, professional services and travel.

Investment and Other Income The Company has engaged a professional money management firm to invest its cash balances in highly liquid financial instruments. The earnings from these investments are included in this category on the financial statements.

Net Income (Loss) Available to Common Shares

The Company is a development stage business engaged in product development and pre-operational activities and therefore has had a $5,762,744 net loss since inception, including the nine months ended September 30, 2007.

Liquidity and Capital Resources

Liquidity

During the period from inception to September 30, 2007, we funded our operating expenditures from cash balances which were received from our private offering of securities in June 2006.

Our cash balance was $127,243 and our investment balance was $1,020,325 at September 30, 2007. These funds are available to support the development of our business plans but are not sufficient to commence construction of the Plants without successfully securing additional funding. Our ability to continue operating will depend on our ability to raise additional funds through equity or debt markets or both. We have been seeking additional capital through the sale and issue of equity and debt financing. At this point we have not been able to obtain this capital.

Our initiatives to raise debt or equity financing to fund capital expenditures or other acquisition and development opportunities may be affected by a number of factors, including the market value of our Common Stock. If the price of our Common Stock declines, then our ability to utilize our stock either directly or indirectly through convertible instruments for raising capital could be negatively affected. Also, raising funds by issuing stock or other equity securities would further dilute our existing stockholders, and this dilution would be exacerbated by a decline in stock price. Any securities we issue may have rights, preferences and privileges that are senior to our existing equity securities. Borrowing money may also involve pledging some or all of our assets.

If we are unable to obtain financing we may not be able to continue as a going concern.

The Company has filed a claim related to the Louis Zehil matter that was disclosed in Item 3, Legal Proceedings, in the Company's annual report filed on form 10KSB in March 2007. The claim totals approximately $2 million. There can be no assurance that the Company will receive funds for this claim. Further if the Company's claim is accepted, the amount and timing of funds received cannot be reasonably estimated at this time.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as described in Item 303(c) of Regulation S-B, promulgated by the Securities and Exchange Commission.

CRITICAL ACCOUNTING ESTIMATES

Use of Estimates

The preparation of financial statements under GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Tuesday 11-13-07 10:13 A.M. Alternative Energy Sources Inc. hit another new low today trading at 17 cents a share.

Monday November 12, 2007

The ethanol company created to build an ethanol plant next to the proposed Volini, Barbara/City of Kankakee Chicago regional garbage dump has announced it is up for sale. Stock Hits Record Low!

They have no projects going anywhere as they have no money. Their stock which trade as high as $2.91 on September 25, 2006, hit a record low today and closed at 28 cents per share.. They are a penny stock company which was incorporated last year and went public July, 2006. Former partners of Barbara and Volini, who had the original deal to build the ethanol plant next to the proposed dump, walked away from doing business with Barbara and Volini so Alternative Energy Sources Inc. was created to replace them.

The proposed site which is next to the dump proposal is in a 100 year floodway. The Illinois Department of Natural Resources is requiring a large relief channel to be dug before any development can take place in that area likely making the area cost prohibited.

Press Release

Source: Alternative Energy Sources Inc.

Alternative Energy Sources, Inc. Announces Formation of a Special Committee to Evaluate Strategic Alternatives and the Execution of a Letter Agreement
Friday November 9, 5:43 pm ET

KANSAS CITY, Mo., Nov. 9, 2007 (PRIME NEWSWIRE) -- Alternative Energy Sources, Inc. (OTC BB:AENS.OB - News) (the ``Company'') announced today that its Board of Directors has formed a Special Committee comprised of W. Gordon Snyder and Douglas D. Wilner to explore and evaluate strategic alternatives aimed at enhancing shareholder value for the Company's non-management stockholders. Strategic alternatives being considered include a possible sale of the Company. The Special Committee has retained the investment banking firm of Christenberry Collet & Company, Inc. to provide independent financial advisory services and has engaged Stinson Morrison Hecker LLP as independent legal counsel. No strategic alternative will be pursued unless it is recommended by the Special Committee.

The Company also announced that the Company and a privately-held company (the ``Potential Acquiror'') have entered into a letter agreement to provide financial assurances to the Potential Acquiror for the time and expense incurred in evaluating a possible purchase of the Company. Under the terms of the letter agreement, the Company is free to pursue any strategic transaction including the sale of the company to another acquiror but is required to pay the Potential Acquiror a fee of $500,000 (and reimburse its reasonable expenses up to $500,000) if, within one year, the Company enters into an agreement with respect to a change-of-control transaction with another acquiror. However, that fee would be payable only upon consummation of such a transaction.