U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

SECURITIES AND EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2008

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

For the transition period from: __________ to __________

Commission file number 333-128191

ALTERNATIVE CONSTRUCTION TECHNOLOGIES, INC.

(Exact Name of Registrant as specified in its charter)

FLORIDA	20-1776133
(State of Incorporation)	(IRS Employer Identification Number)

2910 Bush Drive, Melbourne, FL	32935
(Address of Principal Executive Offices)	(Zip Code)

321-421-6601

(Registrant's telephone number, including area code)

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 past 12 month (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  [  ]

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” 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 [  ] No [X]

At August 17, 2008, 9,735,227 shares of the registrant’s common stock (no par value) were outstanding.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
ITEM I	FINANCIAL STATEMENTS
	CONSOLIDATED BALANCE SHEETS:
	JUNE 30, 2008 AND DECEMBER 31, 2007
	CONSOLIDATED STATEMENT OF INCOME:
	FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007
	CONSOLIDATED STATEMENT OF CASH FLOWS:
	FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
	JUNE 30, 2008
ITEM 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT THE MARKET
ITEM 4	CONTROLS AND PROCEDURES
PART II	OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS
ITEM 1A	RISK FACTORS
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3	DEFAULTS UPON SENIOR SECURITIES
ITEM 4	SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
ITEM 5	OTHER INFORMATION
ITEM 6	EXHIBITS
	SIGNATURES

FORWARD LOOKING STATEMENTS

Statements contained in this Quarterly Report on Form 10-Q which are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts regarding Accelerated Building Concepts Corporation’s (the “Company’s”) business strategy, future operations, financial position, estimated revenues or losses, projected costs, prospects, plans and objectives are forward looking statements. These forward-looking statements appear in a number of places and can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “hopes” or “certain” or the negative of these terms or other variations or comparable terminology.

Management cautions that forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected in such forward-looking statements including, without limitation, the following: the future prospects for and growth of the Company and the industries in which it operates, the level of the Company’s future sales, customer demand and cost of raw materials, the Company’s ability to maintain its business model; the Company’s ability to retain and recruit key personnel; the Company’s ability to maintain its competitive strengths and to effectively compete against its competitors; the Company’s short-term decisions and long-term strategies for the future and its ability to implement and maintain such decisions and strategies, including its strategies: (i) to focus on manufacturing revenue growth from an increasing base of customers, (ii) to focus on leasing revenue growth from an increasing base of leasable assets, and (iii) to create infrastructure capabilities that can provide prompt and efficient project bidding, expedited manufacturing, and rapid delivery; the demand by the educational market (and the K-12 market in particular) for the Company’s modular products; the effect of delays or interruptions in the passage of statewide and local facility bond measures on the Company’s operations; the effect of changes in applicable law, and policies relating to the use of temporary buildings on the Company’s modular sales and leasing revenues, including with respect to class size and building standards; the effects of changes in the level of state funding to public schools and the use of classrooms that meet the Department of Housing requirements; the Company’s ability to maintain and upgrade modular equipment to comply with changes in applicable law and customer preference; the Company’s strategy to effectively implement its expansion into Georgia and other new markets in the U.S.; and the Company’s reliance on its information technology systems; the Company’s engaging in and ability to consummate future acquisitions; manufacturers’ ability to produce products to the Company’s specification on a timely basis; the Company’s ability to maintain good relationships with school districts, other customers, manufacturers, and other suppliers; the impact of debt covenants on the Company’s flexibility in running its business and the effect of an event of default on the Company’s results of operations; the effect of interest rate fluctuations; the Company’s ability to manage its credit risk and accounts receivable; the timing and amounts of future capital expenditures and the Company’s ability to meet its needs for working capital including its ability to negotiate lines of credit; the Company’s ability to track technology trends to make good buy-sell decisions with respect to electronic test equipment; the effect of changes to the Company’s accounting policies and impact of evolving interpretation and implementation of such policies; the risk of litigation and claims against the Company; the impact of a change in the Company’s overall effective tax rate as a result of the Company’s mix of business levels in various tax jurisdictions in which it does business; the adequacy of the Company’s insurance coverage; the impact of a failure by third parties to manufacture our products timely or properly; the level of future warranty costs of modular structures that we sell; the effect of seasonality on the Company’s business; and the Company’s ability to pass on increases in its costs of modular structures, including manufacturing costs, operating expenses and interest expense through increases in rental rates and selling prices. Further, our future business, financial condition and results of operations could differ materially from those anticipated by such forward-looking statements and are subject to risks and uncertainties including the risks set forth above and the “Risk Factors” set forth in this Form 10-Q. Moreover, neither we assume nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements.

Forward-looking statements are made only as of the date of this Form 10-Q and are based on management’s reasonable assumptions, however these assumptions can be wrong or affected by known or unknown risks and uncertainties. No forward-looking statement can be guaranteed and subsequent facts or circumstances may contradict, obviate, undermine or otherwise fail to support or substantiate such statements. Readers should not place undue reliance on these forward-looking statements and are cautioned that any such forward-looking statements are not guarantees of future performance. We are under no duty to update any of the forward-looking statements after the date of this Form 10-Q to conform such statements to actual results or to changes in our expectations.

ITEM I. FINANCIAL STATEMENTS

ALTERNATIVE CONSTRUCTION TECHNOLOGIES, INC.

f/k/a ALTERNATIVE CONSTRUCTION COMPANY, INC.

and SUBSIDIARIES

Consolidated Balance Sheet

ASSETS
	(unaudited)
	June 30,		December 31,
	2008		2007
Current Assets
Cash	$	213,387	$	200,413
Accounts Receivable, Net		3,537,878		1,750,542
Inventory		1,764,587		1,477,112
Prepaid Expenses		402,069		959,365
Costs in Excess of Billings		-		265,403
Total Current Assets		5,917,921		4,652,835
Property, Plant and Equipment, Net		3,046,074		3,167,726
Other Assets		1,200,000		1,462,500
Goodwill		2,355,802		2,355,802
Total Assets	$	12,519,797	$	11,638,863

See accompanying notes to consolidated financial statements.

ALTERNATIVE CONSTRUCTION TECHNOLOGIES, INC.

f/k/a ALTERNATIVE CONSTRUCTION COMPANY, INC.

and SUBSIDIARIES

Consolidated Balance Sheet

	(unaudited)
	June 30,			December 31,
	2008			2007
Current Liabilities
Notes Payable, Current Portion	$	7,180,317		$	626,529
Capital Leases, Current Portion		27,063			26,705
Accounts Payable and Accrued Expenses		736,102			1,500,068
Accrued Payroll and Taxes		38,456			77,865
Due to Related Party		279,161			212,827
Billings in Excess of Costs on Uncompleted Contracts		91,185			-
Deferred Revenue		-			59,266
Total Current Liabilities		8,352,284			2,503,260
Noncurrent Liabilities
Notes Payable, Noncurrent Portion		59,389			4,449,549
Capital Leases, Noncurrent Portion		53,306			66,712
Total Noncurrent Liabilities		112,695			4,516,261
Total Liabilities		8,464,979			7,019,521
Minority Interest		37,169			31,223
Stockholders' Equity
Preferred Stock
Series A convertible preferred stock, voting, $1.00 par
value, 1,500,000 shares authorized, 1,500,000 shares
issued and outstanding, respectively		1,500,000			1,500,000
Series C convertible preferred stock, voting, $.0001 par
value, 1,000,000 shares authorized, 377,358 shares
issued and outstanding, respectively		38			38
Common Stock
Alternative Construction Company, Inc.: no par value,
100,000,000 shares authorized, 9,751,877 and 9,735,227
respectively, shares issued and outstanding
Treasury Stock		(1,999,799	)		(1,999,799	)
Additional Paid In Capital		7,355,365			5,911,565
Accumulated Deficit		(2,837,955	)		(823,685	)
Total Stockholders' Equity		4,017,649			4,588,119

See accompanying notes to consolidated financial statements.

ALTERNATIVE CONSTRUCTION TECHNOLOGIES, INC.

f/k/a ALTERNATIVE CONSTRUCTION COMPANY, INC.

and SUBSIDIARIES

Consolidated Statements of Operations

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Sales	$	1,510,730		$	3,997,773		$	4,064,988		$	5,721,713
Cost of Sales		1,282,443			2,696,063			3,286,130			3,872,248
Gross Profit		228,287			1,301,710			778,858			1,849,465
Banking and Financing Fees		1,403,055			-			1,403,055			-
Operating Expenses		597,675			592,331			1,142,571			972,898
Income (Loss) From Operations		(1,772,443	)		709,379			(1,766,768	)		876,567
Other (Expense)		(124,583	)		(50,306	)		(241,556	)		(85,510	)
Income Tax Benefit		-			-			-			-
Net Income (Loss) Before Minority Interest		(1,897,026	)		659,073			(2,008,324	)		791,057
Minority Interest in Subsidiaries		9,824			(126,525	)		5,947			(149,737	)
Net Income (Loss)	$	(1,906,850	)	$	532,548		$	(2,014,271	)	$	641,320
Adjusted EBITDA	$	(326,561	)	$	754,417		$	(243,851	)	$	972,886
Net Income (Loss) Per Share:
Basic based upon 10,793,623 weighted
average shares outstanding	$	(0.18	)
Basic based upon 13,915,794 weighted
average shares outstanding				$	0.04
Basic based upon 10,793,623 weighted
average shares outstanding							$	(0.19	)
Basic based upon 10,316,368 weighted
average shares outstanding										$	0.06

See accompanying notes to consolidated financial statements.

ALTERNATIVE CONSTRUCTION TECHNOLOGIES, INC.

f/k/a ALTERNATIVE CONSTRUCTION COMPANY, INC.

and SUBSIDIARIES

Consolidated Statement of Cash Flows

For the Six Months Ended June 30

	(unaudited)
	2008			2007
Cash Flows From Operating Activities:
Net Income (Loss)	$	(2,014,271	)	$	641,320
Adjustments to Reconcile Net Income to Net
Cash Used By Operating Activities:
Depreciation and Amortization		111,406			96,319
Minority Interest		5,947			149,737
Issuance of Stock Subscriptions		-			(240,000	)
Decrease (Increase) In:
Accounts Receivable, Net		(1,787,336	)		(382,166	)
Due from Factor, Net		-			61,196
Inventories		(287,475	)		(858,585	)
Prepaid Expenses and Other Current Assets		557,296			(733,412	)
Costs in Excess of Billings on Uncompleted Contracts		265,403			(151,312	)
Other Assets		262,500			-
Increase (Decrease) In:
Accounts payable, accrued expenses and taxes payable		(803,375	)		1,018,110
Due to Related Party		66,334			-
Billings in Excess of Costs on Uncompleted Contracts		91,184			(50,771	)
Deferred Revenue		(59,266	)		(110,392	)
Net Cash Used In Operating Activities		(3,591,653	)		(559,956	)
Cash Flows From Investing Activities:
Acquisition of Property, Plant and Equipment		10,245			(196,181	)
Goodwill from Acquisition of Subsidiary		-			(1,335,646	)
Minority Interest in Subsidiary		-			2,000
Net Cash Provided By (Used In) Investing Activities		10,245			(1,529,827	)
Cash Flows From Financing Activities:
Repayment of Notes Payable, Line of Credit and Capital Leases		(4,403,566	)		(1,166,916	)
Issuance of Notes Payable, Line of Credit and Capital Leases		6,554,148			6,391,474
Issuance of Common Stock		-			1,004,001
Retirement of Series B Preferred Stock		-			(2,000,000	)
Additional Paid in Capital		1,443,800			-
Net Cash Provided By Financing Activities		3,594,382			4,228,559
Net Increase in Cash		12,974			2,138,776
Cash at Beginning of Year		200,413			16,700
Cash at End of Period	$	213,387		$	2,155,475
Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for interest	$	237,387	$	85,510
Taxes Paid	$	-	$	-

See accompanying notes to consolidated financial statements.

ALTERNATIVE CONSTRUCTION TECHNOLOGIES, INC.

f/k/a ALTERNATIVE CONSTRUCTION COMPANY, INC.

 and SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Operation

The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period.  The results of operations for the six months ended June 30, 2008 are not necessarily indicative of the results to be expected for the full year.  The accompanying unaudited consolidated financial statements and footnotes have been condensed and, therefore, do not contain all required disclosures.  Reference should be made to the Company’s annual audited financial statement for the year ended December 31, 2007.

Alternative Construction Technologies, Inc. (“ACT” or the “Company”), was formerly known as Alternative Construction Company, Inc., a Florida corporation formed in 2004.  In July 2007, the Board of Directors with majority consent of its shareholders approved a name change.  Reference to ACT will include the period prior to the name change.

The Company operates a manufacturing facility producing the patented ACTech® Panel System, a structural insulated panel (SIP), a commercial and residential developer in Georgia, Louisiana, Mississippi, Tennessee and Florida, and a promoter of the patented Universal Safe Room™.  Other services provided include designs, consulting and other construction related services.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Alternative Construction Manufacturing of Tennessee, Inc., f/k/a Alternative Construction Technologies Corporation (“ACMT”), Alternative Construction Manufacturing of Florida, Inc. (“ACMF”), Alternative Construction by Revels, Inc. (“ACR”), Future Builders Institute, Inc. (“FBII”), Alternative Construction Consulting Services, Inc. (“ACCS”), Solar 18 ACTech Panel, Inc (“SAP), Modular Rental and Leasing Corporation (“MRLC”), and Alternative Construction Design, Inc. (“ACD”), and its majority-owned subsidiaries, Alternative Construction Safe Rooms, Inc., f/k/a Universal Safe Structures, Inc. (“USS”), Alternative Construction by ProSteel Builders, Inc., f/k/a ProSteel Builders Corporation (“ACPSB”),Alternative Construction by Ionian, Inc., f/k/a Ionian Construction, Inc. (“ACI”).  All significant inter-company transactions have been eliminated in consolidation.  Intercompany transactions include the loans from the parent to its subsidiaries.  Minority Interest, as applicable, has been reported.

Net Earnings (Loss) Per Share

In accordance with SFAS No. 128, Earnings Per Share, basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Potentially dilutive securities are not considered in the calculation of net loss per common share, as their inclusions would be anti-dilutive.

In accordance with SAB No. 98, Earnings Per Share, common shares issued for nominal consideration, if any, would be included in the per share calculations as if they were outstanding for all periods presented. No common shares have been issued for nominal consideration in the periods presented.

Segment Information

In accordance with the provisions of SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, the Company is required to report financial and descriptive information about its reportable operating segments. The Company identifies its operating segments as divisions based on how management internally evaluates separate financial information, business activities and management responsibility. The Company segments and the subsidiaries associated with each segment are as follows:

Manufacturing	Ancillary Services	Development	Corporate
Alternative Construction Manufacturing of Tennessee, Inc.	Alternative Construction Design, Inc.	Alternative Construction by Revels, Inc.	Alternative Construction Technologies, Inc.
Alternative Construction Manufacturing of Florida, Inc.	Alternative Construction Consulting Services, Inc.	Alternative Construction by Ionian, Inc.
	Modular Rental and Leasing Corporation	Alternative Construction by ProSteel Builders, Inc.
	Alternative Construction Safe Rooms, Inc.
	Solar 18 ACTech Panel, Inc.
	Future of Building Institute, Inc

NOTE 2 – RESTATEMENT OF PRIOR PERIOD CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheet

In connection with the review by the PCAOB of the Company’s financial statements for the year ended December 31, 2006, certain errors associated with the Company’s recognition of receivables associated with warrants for the third quarter of 2006, the year ended December 31, 2006, (which are not shown as part of this filing) and the first and second quarter of 2007 (which are a part of this filing) were required to be restated.  The error related to the recording of the receivable as a current asset, not as a reduction of equity as a subscription receivable.  The errors, in all cases, represented overstatements of current assets and stockholders’ equity.

The following table presents the impact of the balance sheet misclassification on the Company’s previously reported consolidated balance sheets for the periods ended, March 31, 2007, and June 30, 2007.

	March 31, 2007							June 30, 2007
	As					As		As					As
	Reported		Adjustments			Restated		Reported		Adjustments			Restated
Assets
Current Assets
Cash	$	145,681	$	-		$	145,681	$	2,155,476	$	-		$	2,155,476
Accounts Receivable, Net		1,889,480		(1,437,500	)		451,980		2,498,377		(1,677,500	)		820,877
Due From Factor, Net		109,882		-			109,882		-		-			-
Inventory		496,350		-			496,350		1,339,202		-			1,339,202
Prepaid Expenses		134,416		-			134,416		848,551		-			848,551
Costs in Excess of Billings		-		-			-		151,312		-			151,312
Total Current Assets		2,775,809		(1,437,500	)		1,338,309		6,992,918		(1,677,500	)		5,315,418
Property, Plant and Equipment, Net		3,070,817		-			3,070,817		3,213,551		-			3,213,551
Goodwill		-		-			-		1,335,646		-			1,335,646
Total Assets	$	5,846,626	$	(1,437,500	)	$	4,409,126	$	11,542,115	$	(1,677,500	)	$	9,864,615

	March 31, 2007									June 30, 2007
	As						As			As						As
	Reported			Adjustments			Restated			Reported			Adjustments			Restated
Liabilities
Current Liabilities
Notes Payable, Current Portion	$	453,323		$	-		$	453,323		$	1,652,706		$	-		$	1,652,706
Accounts Payable and Accrued
Expenses		1,133,649			-			1,133,649			2,069,119			-			2,069,119
Accrued Payroll and Taxes		60,217			-			60,217			56,220			-			56,220
Capital Leases, Current Portion		23,088			-			23,088			24,721			-			24,721
Billings in Excess of Costs on
Uncompleted Contracts		10,980			-			10,980			-			-			-
Deferred Revenue		163,030			-			163,030			52,500			-			52,500
Total Current Liabilities		1,844,287			-			1,844,287			3,855,266			-			3,855,266
Noncurrent Liabilities
Notes Payable, Noncurrent Portion		443,960			-			443,960			4,488,210			-			4,488,210
Capital Leases, Noncurrent Portion		81,813			-			81,813			80,210			-			80,210
Total Noncurrent Liabilities		525,773			-			525,773			4,568,420			-			4,568,420
Total Liabilities		2,370,060			-			2,370,060			8,423,686			-			8,423,686
Minority Interest		(52,985	)		-			(52,985	)		73,540			-			73,540
Stockholders' Equity
Preferred Stock
Series A convertible preferred stock		1,500,000			-			1,500,000			1,500,000			-			1,500,000
Series B convertible preferred stock		201			-			201			-			-			-
Series C convertible preferred stock		38			-			38			38			-			38
Common Stock		-			-			-			-			-			-
Minority Interest in Subsidiaries		400			-			400			2,400			-			2,400
Treasury Stock		-			-			-			(1,999,799	)		-			(1,999,799	)
Subscription Receivable		(1	)		(1,437,500	)		(1,437,501	)		(1	)		(1,677,500	)		(1,677,501	)
Additional Paid In Capital		4,323,874			-			4,323,874			5,327,875			-			5,327,875
Accumulated Deficit		(2,294,961	)		-			(2,294,961	)		(1,785,626	)		-			(1,785,626	)
Total Stockholders' Equity		3,529,551			(1,437,500	)		2,092,051			3,044,887			(1,677,500	)		1,367,387
Total Liabilities and Stockholders' Equity	$	5,846,626		$	(1,437,500	)	$	4,409,126		$	11,542,114		$	(1,677,500	)	$	9,864,614

NOTE 3 - ACQUISITIONS AND NEW SUBSIDIARIES FORMED

Alternative Construction Manufacturing of Tennessee, Inc.

On January 21, 2005, a newly formed acquisition Company, known as ACT acquired all the outstanding stock of ACMT, a privately-held company, and substantially all of the assets of Quality Metal Systems, LLC (“QMS”).  In addition, ACT received an assignment of all the patents related to production by ACMT, which were owned by a shareholder of ACMT.  The original purchase agreements entered into on December 14, 2004 between ACT (purchaser) and ACMT and QMS (sellers) called for the payment of $1,000,000 and issuance of 1,500,000 shares of ACT Series A preferred stock.  During the closing transaction and in performing its due diligence, the purchaser, ACT discovered that both companies would require substantial cash infusions to continue operations.  The sellers agreed to offset the cash down payment with notes payable of $350,000 due February 19, 2005.  On March 10, 2005, the notes were amended and restated with a due date of September 30, 2005.  On July 1, 2005, the notes were amended and adjustments to the reconciliation were mutually agreed to by all parties raising the outstanding balance to $629,894.  Therefore, the cost of the acquisition of ACMT after the net adjustments as a result of further due diligence, was $879,894 of which $750,000 was Series A preferred stock.  The acquisition of the assets of QMS did not change.  A new provision in the notes states that if the Company were to file for public registration, the seller would convert the remaining balance, less $100,000, to common stock at the value of $2.65 per share.  On September 9, 2006, the Seller agreed to convert all of its outstanding receivable into shares of common stock of the Company at $2.65 per share.

On July 27, 2007, as part of the Company’s marketing plan and to enhance efforts to more clearly define its various operating divisions, the name change from Alternative Construction Technologies Corporation to Alternative Construction Manufacturing of Tennessee, Inc., was made.

Alternative Construction by ProSteel Builders, Inc.

On June 28, 2005, the Company acquired an 80% interest in ACP for a purchase price of $800.  As no tangible assets or liabilities were acquired the full value was booked to common stock.

On July 27, 2007, as part of the Company’s marketing plan and to enhance efforts to more clearly define its various operating divisions, the name change from ProSteel Builders Corporation to Alternative Construction by ProSteel Builders, Inc., was made.

Alternative Construction Safe Rooms, Inc.

On April 28, 2005, the Company acquired an 80% interest in ACSR for a purchase price of $800.  As no tangible assets or liabilities were acquired, the full value was booked to Common Stock.

On July 27, 2007, as part of the Company’s marketing plan and to enhance efforts to more clearly define its various operating divisions, the name change from Universal Safe Structures, Inc. to Alternative Construction Safe Rooms, was made.

Alternative Construction Design, Inc.

On July 30, 2007, the Company formed ACD as a wholly-owned subsidiary.  ACD primarily contracts with customers in association with the various design aspects of building including engineering and architecture.

Alternative Construction Consulting Services, Inc.

On July 30, 2007, the Company formed ACCS as a wholly-owned subsidiary.  ACCS primarily contracts with customers for development of joint ventures, research, education and training, and commercial and residential developments both domestically and internationally.

Alternative Construction by Ionian, Inc.

On May 16, 2007, ACP acquired 80% of the outstanding stock of ACI, a privately-held company (see Note 5 - Related Parties).  The purchase agreement was $800,000 payable in restricted common stock of the Company valued at the price of $6.90 per share.  As a condition to the acquisition, the Company is required to pay the liabilities of ACI.  In the event the Company fails to pay the liabilities, the previous owner, who has personal guarantees on those liabilities, and is the brother of the Chairman and CEO of the Company, may repurchase the Company by buying its common stock back at par value ($8,000).

On July 1, 2007, the ownership of ACI was transferred from ACP to ACT.

In accordance with SFAS No. 141, Business Combinations, the acquisition of Ionian Construction, Inc., has been accounted for under the purchase method of accounting.  The purchase price was allocated to Ionian’s tangible assets acquired and liabilities assumed based on their estimated fair values with any excess being ascribed to goodwill.  Management is responsible for determining the fair value of these assets.  The fair value of the assets acquired and liabilities assumed represent management’s estimate of fair values.  The following table summarizes the components of the purchase price and the activity and balance sheet of the acquired company at May 16, 2007:

COMPONENTS OF PURCHASE PRICE
Common Stock	$	800,000
Total Purchase Price	$	800,000
BALANCE SHEET and ACTIVITY at May 16, 2007:
Assets:
Cash	$	11,282
Inventory		1,272,605
Property, Plant and Equipment, net		206,708
Total Assets	$	1,490,595
Liabilities and Stockholders' Equity:
Accounts Payable and Accrued Expenses	$	420,570
Debt		1,739,583
Stockholders Equity		(669,558	)
Total Liabilities and Stockholders' Equity	$	1,490,595
STATEMENT of OPERATIONS for Period JANUARY 1 - MAY 16, 2007:
Sales	$	369,355
Cost of Sales		573,908
Gross Profit		(204,553	)
Operating Expenses		220,916
Income from Operations		(425,469	)
Other Income / (Expenses)		(15,349	)
Income Before Taxes	$	(34,528	)

The purchase price of ACI was $800,000.  The actual value of the assets (net) purchased was $(669,558) as shown below:

	Purchase
Book value of fixed assets	$	206,708
Other assets & liabilities, net		(876,266	)
Acquired assets, net		(669,558	)
Purchase price		800,000
Value less than purchase price	$	1,469,558

On July 27, 2007, as part of the Company’s marketing plan and to enhance efforts to more clearly define its various operating divisions, the name change from Ionian Construction, Inc. to Alternative Construction by Ionian, Inc., was made.

Alternative Construction by Revels, Inc.

In accordance with SFAS No. 141, Business Combinations, the acquisition of Revels Construction, LLC, has been accounted for under the purchase method of accounting.  The purchase price was allocated to Ionian’s tangible assets acquired and liabilities assumed based on their estimated fair values with any excess being ascribed to goodwill.  Management is responsible for determining the fair value of these assets.  The fair value of the assets acquired and liabilities assumed represent management’s estimate of fair values.  As a condition to the acquisition, the Company is required pay the liabilities of ACR.  In the event the Company fails to pay the liabilities, the previous owners, may repurchase the Company by buying its common stock back at par value. The following table summarizes the components of the purchase price and the activity and balance sheet of the acquired company at August 27, 2007:

COMPONENTS OF PURCHASE PRICE
Common Stock	$	1,000,000
Total Purchase Price	$	1,000,000
BALANCE SHEET and ACTIVITY at May 16, 2007:
Assets:
Cash	$	2,939
Inventory		6,050
Property, Plant and Equipment, net		26,189
Total Assets	$	35,178
Liabilities and Stockholders' Equity:
Accounts Payable and Accrued Expenses	$	35,771
Debt		19,563
Stockholders Equity		(20,156	)
Total Liabilities and Stockholders' Equity	$	35,178
STATEMENT of OPERATIONS for Period JANUARY 1 - MAY 16, 2007:
Sales	$	565,005
Cost of Sales		493,951
Gross Profit		71,054
Operating Expenses		33,276
Income from Operations		37,778
Other Income / (Expenses)		-
Income Before Taxes	$	37,778

The purchase price of ACR was $1,000,000.  The actual value of the assets (net) purchased was $(20,156) as shown below:

	Purchase
Book value of fixed assets	$	26,189
Other assets & liabilities, net		(46,345	)
Acquired assets, net		(20,156	)
Purchase price		1,000,000
Value less than purchase price	$	1,020,156

Future Builders Institute, Inc.

On May 9, 2007, the Company formed a not-for-profit Florida corporation, Future Builders Institute, Inc. (“FBII”), for the purposes of attracting and combining "greentech" environmental construction technologies. The FBII's intent is to seek, utilize and promote novel materials and technologies aimed at improving the quality of occupancy by offering total building solutions. The FBII will focus upon the economic and social benefits of certain combinations of these alternative technologies. The FBII will seek to include sustainable, socially responsible, energy efficient and environmentally friendly technologies and principals aimed at reducing the total monthly costs of living. The FBII will be funded by ACT together with other Industry participants for the research, innovation and implementation of these combined solutions to the construction industry.

Modular Rental and Leasing Corporation

On November 28, 2007, the Company acquired Modular Rental and Leasing, Inc. (“MRL”), for the purpose of providing leasing opportunities to the customers of the Company.  The company was acquired from Avante for $800.

Solar 18 ACTech Panel, Inc.

On January 2, 2008, the Company formed Solar 18 AcTech Panel, Inc., (“SAP”), for the purpose of the joint venture agreement it entered into in November, 2007 with Atlan International Holding, Inc.  See Note 10 – Subsequent Events.

Alternative Construction Manufacturing of Florida, Inc.

On February 20, 2008, the Company formed Alternative Construction Manufacturing of Florida, Inc. (“ACMF”), for the purpose of future manufacturing activities in Florida.

NOTE 4 – BALANCE SHEET DETAILS

Inventory consists of the following:

	June 30,		December 31,
	2008		2007
Raw materials	$	525,220	$	405,513
Finished goods		42,170		21,085
Safe room kits		12,091		12,091
Construction related		1,022,851		860,973
Other		100,756		115,952
Finished goods on consignment		61,499		61,499
Total inventory	$	1,764,587	$	1,477,112

Property and equipment consist of the following:

	Useful		June 30,			December 31,
	Life		2008			2007
Building and improvements		20	$	1,000,263		$	1,000,263
Land				68,793			82,781
Computer equipment		3		69,196			66,593
Furniture and fixtures		5		10,832			10,832
Heavy machinery		7		201,844			201,844
Vehicles and trailers		4		51,090			51,090
Machinery and equipment		20		2,316,175			2,315,035
				3,718,192			3,728,438
Less: accumulated depreciation				(672,118	)		(560,712	)
Net property and equipment			$	3,046,074		$	3,167,726

Depreciation expense was $111,406 and $219,645 for the six months ended June 30, 2008 and the year ended December 31, 2007, respectively.

Other assets consist of the following:

	June 30,		December 31,
	2008		2007
Notes Receivable	$	200,000	$	462,500
Long-term Receivable		1,000,000		1,000,000
Other Assets	$	1,200,000	$	1,462,500

Intangible assets consist of the following:

	June 30,		December 31,
	2008		2007
Goodwill	$	2,355,802	$	2,355,802
	March 31,		December 31,
	2008		2007
Notes Receivable	$	200,000	$	462,500
Long-term Receivable		1,000,000		1,000,000
Other Assets	$	1,200,000	$	1,462,500

Notes payable consists of the following:

	June 30,		December 31,
	2008		2007
Dell Financial Services	$	14,673	$	14,907
Merchants & Planters Bank		7,581		7,220
Merchants & Planters Bank		36,753		44,064
BB&T Bank		7,681		11,579
BB&T Bank		649,534		400,188
BB&T Bank		283,357		149,992
CNH Capital		26,734		36,054
CNH Capital		51,079		64,247
BridgePointe Master Fund, Ltd.		2,173,913		2,173,913
BridgePointe Master Fund, Ltd. LOC		2,014,491		-
CAMOFI Master LDC		1,480,435		1,630,435
CAMHZN Master LDC		493,478		543,478
Total debt		7,239,709		5,076,078
Less: Current portion		7,180,320		626,529
Total long-term portion of debt	$	59,389	$	4,449,549

On June 30, 2007, the Company agreed to sell $4,347,826 million aggregate principal amount of Senior Secured Convertible Debentures due 2009 ("Debentures"), pursuant to the terms of a Securities Purchase Agreement dated as of June 30, 2007, among ACT and the purchasers, BridgePointe Master Fund, Ltd., CAMOFI Master LDC and CAMHZN Fund LDC (collectively "Debenture Purchasers"), with net funding of $4,000,000 (after an 8% original issue discount) received at closing.

In connection with the agreed issuance of Debentures, ACT also issued Common Stock Purchase Warrants ("Warrants") also dated June 30, 2007 to the Debenture Purchasers. The Warrants allow the debenture purchasers to acquire up to one hundred and fifty percent (150%) of the shares issuable upon conversion of the Debentures, at an exercise price of $4.00 per share. Dinosaur Securities, LLC, Christopher Moore, and Arthur Whitcomb, the agents for the transaction, received 61,142, 91,712, and 91,711 warrants, respectively, in association with the transaction.  ACT agreed to file a registration statement with the Securities and Exchange Commission ("SEC") covering resales of ACT common stock issuable upon conversion of the Debentures or exercise of the Warrants. The common shares underlying the debentures and warrants were registered for resale by the Company on February 8, 2008.  Because the registration statement was not declared effective within 120 days of the closing of the transaction, the Company was assessed a penalty by the Debenture Purchasers and issued 200,000 additional shares to them as compensation

The Debentures may be converted, at the option of the holder at any time on or prior to maturity, into shares of ACT common stock, at a conversion price of $4.00 per share, provided the Company meets its milestones as defined in the Debenture Purchase Agreement. Interest is payable monthly at the rate of ten percent (10%) per annum beginning July 30, 2007.  The maturity date of the Debentures is June 30, 2009.  To date CAMOFI Master LDC has converted $150,000 into equity and CAMHZN Master LDC has converted $50,000 into equity.

The Debentures are secured by substantially all of the assets of ACT and its subsidiaries and have priority in right of payment with all of its existing unsecured and unsubordinated indebtedness. Under the terms and conditions of the Debentures, the Company is required to reduce the principal amount of the debentures by 1/24 per month effective July 1, 2008 with a balloon payment on July 1, 2009.  The Company has not made the principal payment due on July 1, 2008 and August 1, 2008.

On May 9, 2008 the Company entered into a series of Agreements with the same Debenture holders in connection with establishing a Line of Credit to be collateralized by certain contracts and Purchase Orders of the Company.  The original funding available was $3.0 million with the ability to add an additional lender in order to increase the overall line capability to $4.5 million.  As of August 8, 2008 the Company has received $2,014,491 against the Line of Credit, and has a current outstanding balance of $1,981,750. As of  June 30, 2008 the outstanding balance owed was $2,014,491.  Based upon the contracts it has, the Company has requested additional funding to bring the total cash advance to $3,000,000 but has not yet received the additional funding.  Management has requested a portion of that funding be utilized to pay the principal and interest which is due on the debenture with the remaining funding provided to the Company. As a term and condition of the funding all payments were required to go to a Lock Box account.  The Company erroneously deposited certain checks into its general account without going through the Lock Box and erroneously overstated the amounts of  contracts available for the initial funding.  Although these matters constituted breaches of the agreements, the Company believes that its accounts are now balanced as a result of the submission of new contracts, which, after deducting amounts erroneously received or funded, exceeds the maximum borrowing base of $3,000,000 under the line of credit.

Capitalized lease obligations consist of the following:

	June 30,		December 31,
	2008		2007
Dell Financial Services (1)	$	13,902	$	18,566
Avante Leasing Corporation		66,467		74,851
Total capitalized leases		80,369		93,417
Less: Current portion		27,063		26,705
Total long-term portion of capitalized leases	$	53,306	$	66,712
(1) Includes multiple leases.

Due to Related Party

On June 30, 2007, as a condition of the financing the Company completed with Debenture Purchaser, as discussed in Note 4 – Long-Term Debt; the Company’s Revolving Credit Agreement with Avante was to be closed out.  As of June 30, 2007, due to the retirement of the Series B preferred stock and the open balance on the line of credit, the Company owed Avante $783,483.  Avante issued the Company a Waiver of Default letter stating that the Company would not be required to pay the net balance as it would be detrimental of the Company’s working capital.  The balance owed Avante is recorded as “Due to Shareholder” and has a balance of $307,955 as of June 30, 2008.  To ensure compliance, Avante issued the Company a Waiver of Default letter with an expiration of March 31, 2008.  The letter stipulates that in the event Avante determines that the Company is in default, the Company would be required to remedy the balance with full payment within ten days or issue 4,020,000 shares of its common stock.  The 4,020,000 shares would reflect the two for one conversion rate of the original Series B preferred stock. On July 15, 2008 Avante notified the Company that it was past due on payments and demanded payment within 10 days. As the Company was unable to pay its debt, Avante is entitled to the issuance of 4,020,000 shares of which it has not yet demanded. The issuance of these 4,020,000 shares would not constitute forgiveness of the debt owed.

NOTE 5 – COMMITMENTS

The Company leases a truss building system.  The terms of the agreement include a five year term, 15.53% interest, with a $1 purchase price at the end of the term.  The lease expires on September 30, 2011.  Monthly lease payments are $2,321.25.

The Company leases office space in Melbourne, Florida from GAMI.  The terms of the agreement are monthly payments of $4,000 expiring May 31, 2012.

The Company has various capital leases with Dell Financial Services (see Note 4 – Balance Sheet Details).  As of June 30, 2008, there are six outstanding leases.  Their respective monthly payments and expiration dates are as follows: $649.43, March 16, 2009; $29.11, March 31, 2009; $188.30, August 1, 2010; $71.16, December 1, 2010; $45.08, July 8, 2011; and $62.53, July 11, 2011.

Future minimum obligations for the above leases are as follows:

2008	$	44,201
2009		82,295
2010		79,507
2011		69,645
2012		20,000
Total Lease Obligations	$	295,648

NOTE 6 - BUSINESS SEGMENTS

The Company operates primarily in three segments: manufacturing division (ACMT and ACMF), development division (Georgia –ACP, Tennessee – ACI, and Florida – ACR), and ancillary services division (ACD, ACCS, ACSR, SAP, FBII and MRL). The corporate administration is separated from the operating segments.

Information concerning the revenues and operating income for the year ended June 30, 2008 and 2007, and the identifiable assets for the four segments in which the Company operates are shown in the following table:

	Six Months Ended
	June 30,			June 30,
	2008			2007
OPERATING REVENUE
Manufacturing	$	2,517,779		$	2,651,492
Development		1,526,291			3,298,693
Ancillary Services		-			-
Consolidating Eliminations		(14,832	)		(228,472	)
Consolidated Totals	$	4,029,238		$	5,721,713
INCOME (LOSS) FROM OPERATIONS
Manufacturing	$	397,793		$	535,838
Development		(97,000	)		561,056
Ancillary Services		(4,132	)		(1,885	)
Corporate		(2,099,178	)		(218,443	)
Consolidated Totals	$	(1,802,517	)	$	876,567
IDENTIFIABLE ASSETS
Manufacturing	$	4,309,467		$	5,633,260
Development		1,523,722			387,124
Ancillary Services		1,511,450			(538	)
Corporate		2,783,606			2,509,123
Consolidated Totals	$	10,128,245		$	8,528,969
DEPRECIATION AND AMORTIZATION
Manufacturing	$	88,619		$	88,567
Development		22,368			7,552
Ancillary Services		-			-
Corporate		420			201
Consolidated Totals	$	111,406		$	96,319

NOTE 7 – RELATED PARTIES

On October 1, 2006, Avante Leasing Corporation, a wholly-owned subsidiary of Avante, leased a truss building system to Alternative Construction Manufacturing of Tennessee, Inc.  The terms of the agreement include a five year term, 15.53% interest, with a $1 purchase price at the end of the period.  This transaction was completed as the acquisition and financing of the truss system needed the financial guarantee of Avante and Michael W. Hawkins.  As of June 30, 2008, the balance due to Avante Leasing Corporation under this Agreement was $66,467.

On May 16, 2007, ACP acquired 80% of ACI, a contractor of residential homes in Cleveland, Tennessee.  The acquired shares of Ionian were owned by James Hawkins, the brother of Michael W. Hawkins, the CEO and a Director of the Company.  The minority interest in Ionian is owned by GAMI, a Company owned by the Hawkins Family Trust, in which Michael W. Hawkins is a member.  The acquisition of Ionian at a purchase price of $800,000 was made with the issuance of 115,942 shares of the Company’s common stock, based on the closing price on May 16, 2007 of $6.90.  As a condition to the acquisition, the Company is required pay the liabilities of the Company.  In the event the Company fails to maintain payment of the liabilities, the previous owner, who has personal guarantees on those liabilities, may repurchase the Company by buying its common stock back at par value ($8,000).

On May 16, 2007, the Company agreed with Avante and GAMI to acquire the outstanding 2,010,000 shares of Series B preferred stock (conversion value of 4,020,000 shares of Common Stock), split between Avante and GAMI, 950,000 and 1,060,000, respectively, at a reduced value of $2,000,000 (approximately $.95 per share, if converted to common stock, approximately $.4975 per share).  At the date of the agreement, the calculated fair market value of the outstanding shares (average trading price) was $29,185,200.

On May 29, 2007, GAMI acquired five houses from ACI.  ACI was acquired by the Company on May 16, 2007 as discussed in Note 1 – Summary of Significant Accounting Policies.  The sale of these houses was $1,054,500 and represented the listed sales price to the public.  The balance due to Ionian in regards to this transaction was transferred to ACT as an offset to the balance due to GAMI from the retirement of the Series B Preferred Stock.

On June 1, 2007, the Company leased office space for its corporate office from GAMI for $4,000 per month for five years.

On June 29, 2007, as a condition of the financing the Company completed with Debenture Purchaser, as discussed in Note 3 – Balance Sheet Details; the Company’s Revolving Credit Agreement with Avante was to be closed out.  As of June 30, 2007, due to the retirement of the Series B preferred stock and the open balance on the line of credit, the Company owed Avante $783,483.  Avante issued the Company a Waiver of Default letter stating that the Company would not be required to pay the net balance as it would be detrimental of the Company’s working capital.  The remaining balance payable to Avante, although an Accounts Payable, is recorded as Due to Shareholder.  See Note 4 – Balance Sheet Details.  On July 15, 2008 Avante gave notice to the Company that it had 10 days in which to cure its outstanding balance.  The Company has failed to do so, and as such, upon the mandate by Avante, will be required to issue an additional 4,020,000 shares of its common stock.  The issuance of this stock does not offset the payment of the outstanding debt.

The Exclusive Investment Banking Services Agreement and the Finder Agreement, both dated October 24, 2004, and the Sales Commission Agreement, dated January 20, 2005, all between the Company and Avante, were terminated as of June 30, 2007 as a condition to the financing with Debenture Purchaser.

On February 10, 2008, Sustainable Structures Leasing, Inc. (“SSL”) a subsidiary of Accelerated Building Concepts Corporation (“ABCC”), contracted with ACMF to build two buildings for Gulfstream Aerospace, Inc. (“Gulfstream”) for $1,040,000.  ACMF contracted New Century Structures, Inc. (“NCSI”), a subsidiary of ABCC, as a subcontractor to build the two buildings.  ABCC and ACT have common ownership, and an officer and a director.  Michael W. Hawkins, the Company’s CEO and Chairman, through ownership of Avante and GAMI, is a significant shareholder of both ACT and ABCC.  Additionally, Bruce Harmon was a Director of the Company, and also the Interim CFO and Director of ABCC at the time of the transaction.  ABCC could not fund the needs of the contract with GulfStream through conventional or unconventional methods.  ABCC did have three financing options, two of which would have required for the outright sale of the buildings at a loss to ABCC of more than $200,000 with no potential projected long-term revenue opportunity of a five year lease to Gulfstream with two renewable five year terms.  These options were considered as loss leaders which provided no guarantee for positive revenue for ABCC for the future.  The third option, provided by ACT was the only viable option available that (i) ensured ownership of the buildings remained with SSL; (ii) guaranteed 100% of the revenue recognition to SSL as provided by the contract; and (iii) ensured that SSL could deliver its product within a reasonable timeframe.  Due to this situation, ABCC was in danger of losing a profitable contract for a five-year leasing of the buildings, with two additional five-year periods, along with the potential for additional leasing opportunities of the buildings and up to 25+/- more buildings for Gulfstream.  The ABCC management views Gulfstream as a potential customer with significant revenue opportunities over the next 15 years.  Additionally, at the end of the lease term(s), ABCC would maintain ownership of the buildings providing additional revenue through the sale to GulfStream or a third party(ies).  To ensure that ABCC would not lose a significant part of their revenue stream, which included revenue to ACT through its purchases of the ACTech® Panel from ACMT, management of ACT and ABCC determined that the agreements as stated above would benefit both companies as ACT did have the financing to ensure ABCC the opportunity to fulfill the contracts.  As ACT would have potential risk if NCSI and/or ABCC would encounter problems or legal issues associated with the transaction, the two contracts, SSL / ACMF and ACMF / NCSI, would favor ACMF versus NCSI.  The transaction was not at arm’s length but the management of ABCC had no other options.  ACMF agreed to provide the financing strength with the potential risk exposure.  SSL contracted ACMF for $1,040,000 for the two buildings.  ACMF contracted with NCSI to provide the two buildings for $748,800.  The profit margin was determined to be reasonable under these circumstances with the risk to SSL for not fulfilling the contract with Gulfstream.  As an additional condition of the contract between ACMF and NCSI, NCSI is responsible for interest charges on the financing ACMF received for the sole benefit of the SSL contract.  The interest charges are estimated at $50,000.  The financing received by ACT was for various ACT projects.  As a condition of the financing, ACT was required to issue 1,800,000 warrants for the Company’s common stock at an exercise price of $2.50.  As this was at the detriment of ACT and a portion of the proceeds for the benefit of ABCC, both parties agreed to an additional cost $60,000 as a partial compensation for ACT issued the warrants.  Under these terms and conditions, NCSI would recognize an estimated loss of $315,300 on the construction of the buildings whereas ACMF would recognize a profit of $401,200.  The directors and management of ABCC agreed to the loss as they recognized the potential and opportunities outweighing the potential for legal remedies that Gulfstream could seek for non-performance.  The initial building has been granted a Certificate of Occupancy and GulfStream moved in on July 15, 2008.  The second building has been completed and is awaiting shipment (which is not the responsibility of the Company) to the delivery site. The Company has recognized 100% of the revenue associated with this transaction and has provided the appropriate invoicing for payment.

NOTE 8 – STOCKHOLDERS’ EQUITY

Common Stock

On July 30, 2005, the Board of Directors, pursuant to 607.0821 of the Florida Business Corporation Act, authorized the consolidation of our outstanding common shares, also known as a reverse split, of the Company that caused each one hundred shares of outstanding shares of its common stock to be converted into one share of its common stock.  All share and per share amounts have been adjusted for this reverse stock split.

As of August 18, 2008 ACT has 100,000,000 shares authorized, 9,751,877 shares issued and 9,735,227 shares outstanding at no par value.

On February 28, 2008 CAMOFI Master Fund LDC converted $160,000 of the debenture into equity in exchange for 40,000 shares.  In addition, CAMHZN Master Fund LDC converted $40,000 of the debenture into equity in exchange for 10,000 shares.

On March 3, 2008 the Company issued 73,171 of its common stock for $300,000.  The conversion price was $4.40 per share.

The common shares underlying the debentures and warrants were registered for resale by the Company on February 8, 2008.  Because the registration statement was not declared effective within 120 days of the closing of the transaction, the Company was assessed a penalty by the Debenture purchasers and issued 200,000 additional shares to them as compensation on May 7, 2008.

On May 20, 2008 the Company issued 80,000 shares of its common stock to various principals of Dinosaur Securities, LLC in conjunction with the Line of Credit it entered into on May 9, 2008.  In addition, the Company issued 1,800,000 warrants to various lenders at a purchase price of $2.50 per share.

On May 23, 2008 the Company issued 100,000 shares to JP Turner & Associates, LLC.

On June 17, 2008 the Company cancelled 350,000 shares issued to Bruce Harmon.  Cancellation of the stock was directly associated with the cancellation of a $262,500 promissory note owed by Bruce Harmon to the Company.

 Preferred Stock

The Company authorized, issued and has outstanding 1,500,000 Series A preferred stock at $1.00 par value.  The Series A preferred stock was issued to Paul Janssens in conjunction with the purchase by the Company of ACMT and select assets of Quality Metals Systems, LLC.  This stock has the conversion rights of one for one share of common stock.

The Company has 3,500,000 authorized shares of Series B preferred stock at $0.0001 par value with no shares outstanding.  The Series B preferred stock was initially issued to GAMI and Avante in conjunction with the use of personal guarantees by Michael W. Hawkins, CEO and Chairman of the Company and corporate guarantees by Avante.  Michael W. Hawkins is the managing member of GAMI and GAMI is the majority shareholder of Avante.  The conversion rights were one for two shares of common stock.  On May 16, 2007, the Company purchased the outstanding shares of Series B preferred stock for $2,000,000.

The Company has authorized 1,000,000 shares of Series C preferred stock at $0.0001 par value and has 377,358 shares issued and outstanding.  The Series C preferred stock was issued to New Millennium Entrepreneurs and Avante in conjunction with an investment of $500,000 each.  The $500,000 from Avante relates to a conversion of debt associated with the line of credit between Avante and the Company.  The conversion rights are one for one shares of common stock.

Treasury Stock

On May 16, 2007, the Company purchased 2,010,000 shares of Series B preferred stock from Avante and GAMI for $2,000,000.

NOTE 9 – LEGAL PROCEEDINGS

On October 2, 2006, the Company was named in a lawsuit captioned New Millennium Enterprises, LLC and Phoenixsurf.com, LLC v. Michael W. Hawkins, et. al. U.S. District Court, Middle District of Georgia, 3: 06-CV-84 (CDC).  The lawsuit alleges violations of the Georgia Securities Act, Georgia Fair Business Practices Act, Federal Securities laws and certain other unspecified laws in connection with the investment by Plaintiffs of $500,000 in ACC and seeks rescission of this investment.  Plaintiffs amended their complaint on April 11, 2007.  The Company filed an answer to the amended complaint denying all essential allegations of the complaint and asserting affirmative defenses showing why the plaintiffs are not entitled to the relief sought.  In addition, the Company filed Counterclaims against the Plaintiffs and Third Party claims against individual officers and directors of Plaintiff, alleging a malicious interference with the Company’s business and business relations, conspiracy to interfere with our business, libel and slander, and violation of rights under Title IX of the Organized Crime Control Act of 1970 as amended.  The Parties are to establish a consolidated plan of discovery in 2008.  The Company believes it has meritorious defenses to the claims and intends to vigorously defend this lawsuit and to pursue its counterclaims.  On August 5, 2008 the parties conducted a settlement conference and entered into a protective order for the dissemination of certain information.  Discovery is scheduled to be completed by February 2009.

On January 30, 2008, the Company was named in a lawsuit captioned Kelco Metals, Inc. v. Alternative Construction Technologies, Inc., Circuit Court of Cook County Illinois, 2008L001092.  The lawsuit alleges breach of contract in the amount of $109,197.27.  The Company entered into an agreement with Kelco to acquire metal which was to have been sent to a third party, Precoat Metal Division, for the metal to be galvanized.  Kelco Metals, Inc. demanded prepayment prior to shipping to the Company and held up the metal at Precoat Metal Division.  The Company elected not to pay for the metal as the demand for prepayment was a contradiction to the payment terms.  The Company believes that Kelco subsequently sold the inventory in question for more than the amount of the claim.

Two of the Company’s subsidiaries have been sued by vendors (one in each Company) for nonpayment totaling approximately $60,000.  The payment of these outstanding invoices is directly related to these subsidiaries not receiving payment from customers.  In one case, the Company has sued its customer for final payment of approximately $250,000 (which it maintains a reserve for) and has told the vendors associated with this matter that once the Company is paid they will get paid.  As a matter of construction law, each vendor has the right to file a lien against the property for payment.  The Company has filed all appropriate liens.  The total outstanding balance of the lawsuits against the subsidiaries of the Company do not warrant a material effect on the Company’s performance.

NOTE 10 – SUBSEQUENT EVENTS

On August 11, 2008 the Company was notified by Solar 18, Inc. (“Solar 18”) (f/k/a Atlan International Holdings, Inc.) that, as a condition   to its proposed financing of up to $10,000,000,with an institutional lender it was asked to convert its outstanding receivable into preferred shares of Solar 18.  Under the proposal ACCS or is designee would be issued 2,000,000 shares of Solar 18 Series A Preferred Shares which would convert on a 1x1 basis into common shares of Solar 18 at market value.  The Company has not yet made a decision whether to accept the proposal.  The Company will be reviewing the terms and conditions of the financing, the proposed terms and conditions of the preferred stock and the business plan of Solar 18, Inc.  The Joint Venture between the Company and Solar 18 has now finalized the design of its product and received its initial shipment of product.  ACT expects to begin marketing the new product through the Joint Venture as soon as issues involving its financing are resolved.

On July 19, 2008 BridgePointe Master Fund, one of the lenders, notified the Company that it did not intend to fund any additional draw-downs under the line of credit until all current defaults had been corrected.  On July 31, 2008 BridgePointe Master Fund notified the Company that it was in default in its debenture and that it must cure such defaults within five (5) days.  On August 1, 2008 BridgePointe Master Fund notified the Company that it was in default in its line of credit and had five (5) days to cure it.  The terms of the debentures called for principal amortization there under to commence on July 1, 2008, at the rate of approximately $90,500 per month, which equates to a rate of 1/24 per month with a balloon payment due July 1, 2009 for any outstanding remaining balance.  The Company is unable to make these payments without access to additional outside funding or in connection with draw-downs under the line of credit.  The Company is working with its lenders and outside parties to reach agreement upon a satisfactory restructuring of this debt or payments to cure any defaults.  While the Company is hopeful that a resolution can be achieved in the short term, if it is not, at least one lender has notified the Company that it will commence collection efforts, to include foreclosure on assets securing the debenture.

ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2008

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements under federal securities laws.  Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties.  Our actual results could differ materially from those indicated by forward-looking statements as a result of various factors, including but not limited to those set forth under this Item, as well as those discussed in Part II - Item 1A, “Risk Factors,” and elsewhere in this document and those that may be identified from time to time in our reports and registration statements filed with the Securities and Exchange Commission.

This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes included in Part I – Item 1 of this Quarterly Report on Form 10-Q and the Consolidated Financial Statements and related Notes and the Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 7, 2008.

DESCRIPTION OF COMPANY:

Our corporate headquarters is located at 2910 Bush Drive, Melbourne, Florida 32935. Its website address is http://www.actechpanel.com.  In addition, Alternative Construction by Revels, Inc., a subsidiary of ACCY maintains a website at www.acbyrevels.com. The website is not incorporated in this Form 10-Q.

ACCY operates under three divisions; a (i) Alternative Construction Manufacturing Division, (ii) Alternative Construction Development Division, and (iii) Alternative Construction Ancillary Services Division.  The Manufacturing Division currently contains two subsidiaries, ACMT, which manufactures the ACTech® Panel System, and ACMF, which will provide manufacturing services in Florida.  The Development Division contains three subsidiaries; Alternative Construction by ProSteel Builders, Inc., Alternative Construction by Ionian, Inc., and Alternative Construction by Revels, Inc.  The Alternative Construction Ancillary Services Division contains five subsidiaries; Alternative Construction Design, Inc., Alternative Construction Consulting Services, Inc., Alternative Construction Safe Rooms, Inc., Modular Rental and Leasing Corporation, and Solar 18 ACTech Panel, Inc.    Future of Building Institute, Inc., as a non-profit entity, functions separately.

OVERVIEW:

Alternative Construction Technologies, Inc., formerly known as Alternative Construction Company, Inc. (the “Company” or “ACCY”), is a Florida corporation organized in 2004 with corporate offices located in Melbourne, Florida. The Company’s common stock is traded on the NASDAQ OTC Bulletin Board under the symbol “ACCY.OB.”

The Company is a manufacturing company engaged in the research, development and marketing of proprietary products for the construction industry. We manufacture and distribute the ACTech® Panel, a structural insulated panel (SIP), throughout the United States. Our products are marketed through our internal sales staff and by manufacturer representatives.

The Company’s primary product and service is the manufacturing, research, development and marketing of proprietary products for the construction industry. We manufacture and distribute the ACTech® Panel, a structural insulated panel (SIP), throughout the United States, with concentration in the southeast region. The Company has delivered its products and services internationally and believes that a huge portion of its future growth will be derived from those markets. The marketing of our products is through our internal sales staff and the use of manufacturer representatives.  The Company currently licenses 21 manufacturer sales representatives.

Our corporate headquarters is located at 2910 Bush Drive, Melbourne, Florida 32935. Its website address is http://www.actechpanel.com.  The website is not incorporated in this Form 10-Q.

In 2007, the Company experienced a 50.1% growth in sales to $12,960,008, as compared to 2006 sales of $8,634,349.  Net income of $1,603,261, represents an increase of $3,642,555 in net income from 2006.  The Company earned $0.22 per basic share in 2007.  The potential dilutive effects of convertible debt and securities warrants and options in 2007, while providing a significant increase in available cash, would have had a negative effect on earnings by $0.08 per share outstanding during 2007.  The Company performance is indicative of the management decisions made in 2006.

The growth of the Company was negatively impacted by the inability to obtain new financing in January 2008.  As part of its financing in June 2007, the Company stated to its lenders that additional capital would be required within a short period of time to maintain the growth levels that the Company expected to achieve.  The Company began negotiating with its financiers in December 2007 and January 2008 to secure such additional financing.  Simultaneously with these discussions, the Company obtained commitments for additional equity and secured financing from third parties.  In each case, such third parties required the debenture holders to waive or amend the terms of the “Green Shoe” option which they were granted in connection with the June 2007 debenture financing.  A waiver or satisfactory amendment could not be agreed upon and the Company’s cash needs were not met.

In May 2008 the Company entered into a $3,000,000 line of credit financing with the existing financiers.  The line of credit is secured by “eligible” contracts and drawn down there under with interest at 13%.  On June 30, 2008 the outstanding balance was $2,014,491, and there is currently $1,981,750 outstanding under this facility and $1,018,250 available for funding.  On August 6, 2008 the Company provided the lenders with a notice of draw-down from the line of credit in the amount of $1,018,250 to maximize the line of credit.  The Company provided the lenders with copies of existing contracts and purchase orders totaling an approximate $5.4 million.  The Company authorized the lenders to apply $467,560 of the funding request against the outstanding debenture principal and interest, which would bring the Company current in all payments.

On July 19, 2008 BridgePointe Master Fund, one of the lenders, notified the Company that it did not intend to fund any additional draw-downs under the line of credit until all current defaults had been corrected and a “field audit” conducted.  On July 31, 2008 BridgePointe Master Fund notified the Company that it was in default in its debenture and that it must cure such defaults within five (5) days.  On August 1, 2008 BridgePointe Master Fund notified the Company that it was in default in its line of credit and had five (5) days to cure it.  The terms of the debentures called for principal amortization there under to commence on July 1, 2008, and monthly thereafter at a rate of 1/24 per month with a balloon payment due July 1, 2009 for any outstanding remaining balance.  The Company is unable to make these payments without access to additional outside funding or in connection with draw-downs under the line of credit.  The Company is working with its lenders and outside parties to reach agreement upon a satisfactory restructuring of this debt or payments to cure any defaults.  While the Company is hopeful that a resolution can be achieved in the short term, if it is not, at least one lender has notified the Company that it will commence collection efforts, to include foreclosure on assets securing the debenture. On August 12, 2008 the lender requested additional information in order to consider the outstanding financing obligation.  The Company responded on August 14, 2008.

The following Management Discussion and Analysis should be read in conjunction with the financial statements and accompanying notes included in this Form 10-Q. 

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2008 TO THE THREE MONTHS ENDED  JUNE 30, 2007

	Manufacturing Division				Ancillary Division						Development Division					ACT Corporate						Eliminations						Consolidated
For the Three Months Ended June 30:	2008		2007		2008			2007			2008			2007		2008			2007			2008			2007			2008			2007
Revenue	$	1,047,836	$	1,630,801	$	-		$	-		$	477,726		$	2,478,931	$	-		$	-		$	(14,832	)	$	(111,959	)	$	1,510,730		$	3,997,773
Cost of Sales		799,601		1,045,400		13			-			497,661			1,798,992		-			-			(14,832	)		(148,329	)		1,282,443			2,696,063
Gross Profit		248,235		585,401		(13	)		-			(19,935	)		679,939		-			-			-			36,370			228,287			1,301,710
Operating Expenses		98,359		187,427		2,285			585			86,074			236,972		1,814,011			167,347			-			-			2,000,729			592,331
Income (Loss) from Operations	$	149,876	$	397,974	$	(2,298	)	$	(585	)	$	(106,009	)	$	442,967	$	(1,814,011	)	$	(167,347	)	$	-		$	36,370		$	(1,772,442	)	$	709,379

Total revenues decreased to $1,510,730 for the three months ended June 30, 2008 from $3,997,773 for the three months ended June 30, 2007. The decrease of $2,522,793 or 62.2% resulted primarily from the Company’s inability to reach financing terms and the lack of capital it needed to move forward with the contracts it had in place.  The Company believes it lost significant business because of its inability to reach financing terms with its financing partners.  Once financing was achieved, May 8, 2008, the Company began moving forward with its remaining contracts, currently valued at $5.4 million, of which approximately $372,000 was recognized this quarter.

Total revenues and as a percent of consolidated revenues for the three months ended June 30, 2008, were provided as follows:  Manufacturing Division - $1,047,836 (62.8%) and Development Division - $477,726 (31.6%).  The difference between the reported revenue and the individual subsidiaries is the result of consolidating eliminations and the cost associated with the Ancillary Division.

Cost of sales was $1,282,443 and $2,696,063, respectively for the three months ended June 30, 2008 and 2007. As a percent of revenue, the cost of sales increased from 77.0% to 84.9%, for the three months ended June 30, 2007 as compared to the three months ended June 30, 2008. The Manufacturing Division recognizes a lower cost of sales percent, 76.3%, than the consolidated total of the developing division at 104.2%, therefore, when the Development Division recognizes a greater percentage of the overall revenue, the cost of sales increase.  In addition, the pricing of raw materials has had substantial increases during this reporting period, which create a negative impact on cost of sales.

Gross profit was $228,287 and $1,301,710, respectively for the three months ended June 30, 2008 and 2007.   As a percent of revenue, gross profit was 15.1% and 23.0%, respectively for the three months ended June 30, 2008 and 2007.  One cause of the decline in gross profit is a direct correlation to the revenue split between the Manufacturing Division and the Development Division as defined in cost of sales above.  In addition, the loss of revenue caused by the lack of funding, had a direct impact on the gross profit as the Company’s management had to consider the implications of laying off qualified staff that would look for work elsewhere.  The Company elected to maintain the staff and as such gross profit declined.

Total operating expenses increased to $2,000,729 for the three months ended June 30, 2008 from $592,331 for the three months ended June 30, 2007. This $1,408,398 or 70.4% increase was attributed mostly to the write-off of financing fees associated with the debenture agreement of June 30, 2007 and the financing fees and costs associated with the Line of Credit agreement of May 9, 2008 of $1,403,055.

The operating expenses and the percent of consolidated operating expenses for the three months ended June 30, 2008, were contributed as follows:  Manufacturing Division $98,359 (4.9%); Development Division $86,074 (4.3%); the Ancillary Division  $2,285 (0.1%); and Corporate, $1,814,011(90.7%).

Adjusted Earnings Before Depreciation, Interest, Taxes, and Amortization

The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company’s liquidity and financial condition and because management, as well as the Company’s lenders, uses this measure in evaluating the performance of the Company.

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate the Company’s period-to-period operating performance and evaluate the Company’s ability to meet future capital expenditure and working capital requirements. Management believes the exclusion of non-cash charges, including stock-based compensation, is useful in measuring the Company’s cash available to operations and the performance of the Company. Management also believes that financing fees associated with the raising of capital is a one time fee that does not accurately reflect the overall performance of the Company.  Because the Company finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company’s performance.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP in the United States or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. Unlike EBITDA which may be used by other companies or investors, Adjusted EBITDA does not include stock-based compensation charges and income from minority interest in the Company’s subsidiaries, ACP, ACI, and ACSR. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance. Since Adjusted EBITDA is a non-GAAP financial measure as defined by the Securities and Exchange Commission, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States.

		Three Months Ended					Six Months Ended
		June 30,					June 30,
		2008			2007		2008			2007
	Net Income (Loss)	$	(1,942,600	)	$	532,548	$	(2,050,021	)	$	641,320
	Minority Interest in Income (Loss) of Subsidiary		(9,824	)		126,525		(5,947	)		149,737
	Provision for Income Taxes		-			-		-			-
	Interest		124,583			50,306		241,556			85,510
	Income from Operations		(1,827,841	)		709,379		(1,814,412	)		876,567
	Depreciation and Amortization		56,425			45,038		111,406			96,319
	Non-Cash Stock Based Compensation		41,800			-		56,100			-
	Financing Fees		1,403,055			-		1,403,055			-
1	Adjusted EBIDTA	$	(326,561	)	$	754,417	$	(243,851	)	$	972,886
2	Adjusted EBIDTA Margin		(21.6%)			18.90%		(5.99%)			17.00%
1	Adjusted EBIDTA is defined as net income before minority interest in income of subsidiaries, interest expense and financing fees, provisions for income taxes, depreciation, amortization, and other non-cash stock-based compensation.
2	Adjusted EBIDTA Margin is calculated as Adjusted EBIDTA divided by total revenues for the period.

Manufacturing Division

Manufacturing Division
	ACMT				ACMF				Eliminations						Consolidated
For the Three Months Ended June 30:	2008		2007		2008		2007		2008			2007			2008		2007
Sales	$	674,086	$	1,630,801	$	373,750	$	-	$	(14,832	)	$	(111,959	)	$	1,033,004	$	1,518,842
Cost of Sales		556,241		1,045,400		243,360		-		(14,832	)		(148,329	)		784,769		897,071
Gross Profit		117,845		585,401		130,390		-		-			36,370			248,235		621,771
Operating Expenses:		98,359		187,427		-		-		-			-			98,359		187,427
Income From Operations	$	19,486	$	397,974	$	130,390	$	-	$	-		$	36,370		$	149,876	$	434,344

ACMF recognized $373,750 (33.9%) in revenue directly associated with the facilities for GulfStream Aerospace. As ACMF was incorporated in 2008 it has no historical financials in which to compare revenue.  ACMT’s revenue decreased from $1,630,801 to $674,086 (58.7%) for the three months ended June 30, 2007 and 2008, respectively.    ACMT revenue decrease was directly associated with the inability of the Company to receive financing, which delayed the delivery of our raw materials.  The cycle for obtaining raw materials, especially our steel requirements, has created shortfalls in production and our lack of performance on outstanding orders.  All steel suppliers now require cash payment before delivery scheduling, which often can take up to two weeks for delivery.  As the Company has been sporadically funded under the line of credit, and never on the schedule in which it was promised, the Company must often shut down production for weeks at a time while waiting on raw materials.

The manufacturing facility, ACMT, recognizes a cost of sales percent, 82.5%, (37.7% of the overall cost of sales), while ACMF recognizes a cost of sales percent, 65.1%, (29% overall cost of sales), respectively which represents an increase of 17.6% which is caused by two factors, (i) the increase cost of raw materials, and (ii) the Company is required to maintain certain levels of staffing and facility operations that increase overall cost of sales as a percentage when production levels decline. ACMT’s cost of sales decreased from 1,045,400 to 556,241 (46.8%) for the three months ended June 30,  2007 and 2008, respectively as a direct result in the reduction of gross sales.

ACMT represents 4.9% of the overall operating expenses of the Company.  Payroll, insurance, maintenance and marketing represent the majority cost of operations.

Development Division

Development Division
	ACP					ACI				ACR					Eliminations				Consolidated
For the Three Months Ended June 30:	2008			2007		2008		2007		2008			2007		2008		2007		2008		2007
Sales	$	-		$	1,196,756	$	216,691	$	1,282,175	$	261,035		$	-	$	-	$	-	$	216,691	$	2,478,931
Cost of Sales		30			783,981		117,564		1,015,011		380,067			-		-		-		117,594		1,798,992
Gross Profit		(30	)		412,775		99,127		267,164		(119,032	)		-		-		-		99,097		679,939
Operating Expenses:		16,519			220,784		26,421		16,188		43,134			-		-		-		42,940		236,972
Income From Operations	$	(16,549	)	$	191,991	$	72,706	$	250,976	$	(162,166	)	$	-	$	-	$	-	$	56,157	$	442,967

The revenue attributed by ACI and ACR for the period was $216,691 (14.3% of the overall revenue) and $261,035 (17.7% of the overall revenue), respectively.  ACPSB’s revenue decreased from $1,196,756 to $0 for the three months ended June 30, 2007 and 2008, respectively, as the office has been closed.

ACI and ACR, have a higher cost of sales percent (54.3% and 145.6%, respectively) as compared to the consolidated percent.  The increase of cost of sales is directly related to the delays caused by the lack of financing.  ACI cost of sales represents 9.2% of the overall cost of sales, and ACR represents 29.6% of the overall cost of sales,  The cost of sales for ACR relates to cost overruns on a project that was inherited with the acquisition.  The overrun cost was approximately $135K.  The additional increase, as a percentage, of the cost of sales was directly related to the slow building process, caused by constant delays in cash availability.

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2008 TO THE SIX MONTHS ENDED JUNE 30, 2007

Results of Operations

	Manufacturing Division				Ancillary Division						Development Division					ACT Corporate						Eliminations						Consolidated
For the Six Months Ended June 30:	2008		2007		2008			2007			2008			2007		2008			2007			2008			2007			2008			2007
Revenue	$	2,553,529	$	2,651,492	$	-		$	-		$	1,526,291		$	3,298,693	$	-		$	-		$	(14,832	)	$	(228,472	)	$	4,064,988		$	5,721,713
Cost of Sales		1,885,895		1,749,918		813			-			1,414,257			2,350,802		-			-			(14,832	)		(228,472	)		3,286,133			3,872,248
Gross Profit		667,634		901,574		(813	)		-			112,034			947,891		-			-			-			-			778,855			1,849,465
Operating Expenses		234,091		364,717		3,319			1,885			209,035			387,853		2,099,178			218,443			-			-			2,545,623			972,898
Income (Loss) from Operations	$	433,543	$	536,857	$	(4,132	)	$	(1,885	)	$	(96,999	)	$	560,038	$	(2,099,178	)	$	(218,443	)	$	-		$	-		$	(1,766,766	)	$	876,567

Total revenues decreased to $4,064,988 for the six months ended June 30, 2008 from $5,721,713 for the six months ended June 30, 2007. The decrease of $1,656,725 or 28.9% resulted primarily from the Company’s inability to reach financing terms and the lack of capital it needed to move forward with the contracts it had in place.  The Company lost $19 million in contracts due to its inability to reach financing terms with its financing partners.  Once financing was achieved, May 8, 2008, the Company began moving forward with its remaining contracts, currently valued at $5.3M, of which approximately $1.1 million was recognized during the six month period.

Total revenues and as a percent of consolidated revenues for the three months ended June 30, 2008, were provided as follows:  Manufacturing Division - $2,553,529 (62.8), and Development Division - $1,526,291 (37.5%).  The difference between the reported revenue and the individual subsidiaries is the result of consolidating eliminations and the cost associated with the Ancillary Division.

Cost of sales was $3,286,132 and $3,872,248, respectively for the six months ended June 30, 2008 and 2007. As a percent of revenue, the cost of sales increased from 67.7% to 80.8%, for the six months ended June 30, 2007 as compared to the six months ended June 30, 2008. The manufacturing division recognizes a lower cost of sales percent, 73.9%, than the consolidated total of the developing division at 92.7%, therefore, when the developing division recognizes a greater percentage of the overall revenue, the cost of sales increase.  In addition, the pricing of raw materials has had substantial increases during this reporting period, which create a negative impact on cost of sales.

Gross profit was $743,107 and $1,849,465, respectively for the six months ended June 30, 2008 and 2007.   As a percent of revenue, gross profit was 19.2% and 32.3%, respectively for the six months ended June 30, 2008 and 2007.  One cause of the decline in gross profit is a direct correlation to the revenue split between the Manufacturing Division and the Development Division as defined in cost of sales above.  In addition, the loss of revenue caused by the lack of funding, had a direct impact on the gross profit as the Company’s management had to consider the implications of laying off qualified staff that would look for work elsewhere.  The Company elected to maintain the staff and as such, gross profit declined.

Total operating expenses increased to $2,545,623 for the six months ended June 30, 2008 from $972,898 for the six months ended June 30, 2007. This $1,572,725 or 61.8% increase was mainly attributable to the write-off of financing fees associated with the debenture agreement of June 30, 2007 and the Line of Credit agreement of May 9, 2008 of $1,403,055.  The additional expenses represent stock-based compensation, and an increase in marketing expenses and legal fees.

The operating expenses and the percent of consolidated operating expenses for the six months ended June 30, 2008, were contributed as follows:  Manufacturing Division $234,091 (9.20%); Development Division $209,035 (8.20%); the Ancillary Division  $1,034 (0.1%); and Corporate, $2,099,178 (82.4%).

Manufacturing Division

Manufacturing Division
	ACMT				ACMF				Eliminations						Consolidated
For the Six Months Ended June 30:	2008		2007		2008		2007		2008			2007			2008		2007
Sales	$	1,403,529	$	2,651,492	$	1,150,000	$	-	$	(14,832	)	$	(228,472	)	$	2,538,697	$	2,423,020
Cost of Sales		1,137,095		1,749,918		748,800		-		(14,832	)		(228,472	)		1,871,063		1,521,446
Gross Profit		266,434		901,574		401,200		-		-			-			667,634		901,574
Operating Expenses:		234,021		364,717		70		-		-			-			234,091		364,717
Income From Operations	$	32,413	$	536,857	$	401,130	$	-	$	-		$	-		$	433,543	$	536,857

In the first quarter of 2008 the company incorporated ACMF to manufacture modular facilities.  ACMF signed its first contract on February 10, 2008 with Sustainable Structures Leasing in order to build two modular buildings for GulfStream Aerospace.  ACMF recognized $1,150,000 in revenue. ACMT’s revenue decreased from $2,651,492 to $1,403,529 (47.1%) for the six months ended June 30, 2007 and 2008, respectively.

The manufacturing facility, ACMT, recognizes a cost of sales percent, 81.0%, (27.9% of the overall cost of sales), while ACMF recognizes a cost of sales percent, 65.1%, (18.4% overall cost of sales), ACMT’s cost of sales decreased from $1,749,918 to $1,137,095 (35%) for the six months ended June 30, 2007 and 2008, respectively due primarily to the reduction of gross sales

ACMT represents 9.20% of the overall operating expenses of the Company.  Payroll, insurance, maintenance and marketing represent the majority cost of operations.

Development Division

Development Division
	ACP					ACI				ACR					Eliminations				Consolidated
For the Six Months Ended June 30:	2008			2007		2008		2007		2008			2007		2008		2007		2008			2007
Sales	$	-		$	2,016,518	$	902,390	$	1,282,175	$	623,903		$	-	$	-	$	-	$	1,526,293		$	3,298,693
Cost of Sales		61			1,335,791		745,047		1,015,011		669,148			-		-		-		1,414,256			2,350,802
Gross Profit (Loss)		(61	)		680,727		157,343		267,164		(45,245	)		-		-		-		112,037			947,891
Operating Expenses		59,952			371,665		55,382		16,188		93,702			-		-		-		209,036			387,853
Income (Loss) From Operations	$	(60,013	)	$	309,062	$	101,961	$	250,976	$	(138,947	)	$	-	$	-	$	-	$	(96,999	)	$	560,038

The revenue attributed by ACI and ACR for the period was $902,390 (22.4% of the overall revenue) and $623,903 (15.5% of the overall revenue), respectively.  The decrease is due to lack of financing and the increased cost of inventory pending sales. ACPSB’s revenue decreased from $2,016,158 to $0 for the six months ended June 30, 2007 and 2008, respectively, as the office has been closed.

ACI and ACR, have a higher cost of sales percent (82.6% and 107.3%, respectively) as compared to the consolidated percent.  ACI cost of sales represents 22.7% of the overall cost of sales, and ACR represents 20.4% of the overall cost of sales.  The increase cost of sales associated with ACR stems from a partial contract at the time of acquisition in 2007, which ran into delays and excess costs that the Company had to cover.  The additional cost associated with this project was approximatley $135,000.

Liquidity and Capital Resources

As of June 30, 2008, the Company had a working capital deficit, and negative cash of $2,470,114.  Net loss was $2,050,021 for the six months ended June 30, 2008. The Company generated a negative cash flow from operations of $3,591,654 for the six months ended June 30, 2008. The negative cash flow from operating activities for the period is primarily attributable to the Company's increase in accounts receivables, $1,751,586, decrease in costs in excess of billings on uncompleted contracts, 265,402, decrease in issuance of long-term receivable, 262,500 decrease in accounts payable, accrued expenses, and taxes payable, $803,375, increase in inventories, $287,475, offset by a decrease in prepaid expenses, $557,296, billings in excess of costs on uncompleted contracts, $91,185, increase in due to shareholder, 66,334, and decrease in deferred revenue, $59,266.

Cash flows used in investing activities for the six months ended June 30, 2008 consisted of the acquisition of $10,245 of manufacturing equipment and computers used in operations.

Cash flows provided by financing activities for the six months ended June 30, 2008 was $594,103 primarily due to the sale of common stock.  In addition, the Company received financing cash from the Line of Credit entered into on May 9, 2008 in the amount of $2,014,491.

The Company had a net increase in cash of $12,974 for the six months ended June 30, 2008 compared to an increase of $2,138,776 for the six months ended June 30, 2007.  The comparison of net income increase in cash is disproportionate because on June 30, 2007, the Company completed the placement of Senior Secured Convertible Debentures with a group of private investors.  The net proceeds of $4,000,000 were used to pay-off debt, pay down payables and to provide working capital to fund the Company’s marketing plan.  See Note 4 – Long-Term Debt, which created the net cash increase of $2,138,776.

On May 9, 2008 the Company entered into a $3.0 million line of credit creating the ability for the Company to fulfill its obligations under its current contracts.  The line of credit does not provide the necessary funding for the Company to sustain operations and to continue as a going concern.  If the pricing of commodities and other raw materials continue to increase dramatically, sales grow rapidly, and we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations, liquidity and financial condition. This is evident with the loss of significant contracts, the delays associated with recognizable revenue, and the acceptance of capital the Company has had to obtain on very onerous and unfavorable terms.

The effect of inflation on the Company's revenue and operating results was not significant. The Company's operations are located in North America and there are no seasonal aspects that would have a material effect on the Company's financial condition or results of operations.  The current market conditions associated with construction in the United States has created a since of concern on the market and has had a negative effect upon the Company’s growth.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s market risk exposures from those reported in our Annual Report on Form 10-K for the year December 31, 2007.

ITEM 4. CONTROLS AND PROCEDURES SEE NOTES

The Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), currently the same person, performed an evaluation of the effectiveness of the design, maintenance and operation of the Company’s disclosure controls and procedures of June 30, 2008. Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective.  There have been no significant changes in the Company’s internal controls or in other factors that materially affected, or would reasonably be likely to materially affect, the Company’s internal control over financial reporting.

PART II.   OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On October 2, 2006, the Company was named in a lawsuit captioned New Millennium Enterprises, LLC and Phoenixsurf.com, LLC v. Michael W. Hawkins, et. al. U.S. District Court, Middle District of Georgia, 3: 06-CV-84 (CDC).  The lawsuit alleges violations of the Georgia Securities Act, Georgia Fair Business Practices Act, Federal Securities laws and certain other unspecified laws in connection with the investment by Plaintiffs of $500,000 in ACC and seeks rescission of this investment.  Plaintiffs amended their complaint on April 11, 2007.  The Company filed an answer to the amended complaint denying all essential allegations of the complaint and asserting affirmative defenses showing why the plaintiffs are not entitled to the relief sought.  In addition, the Company filed Counterclaims against the Plaintiffs and Third Party claims against individual officers and directors of Plaintiff, alleging a malicious interference with the Company’s business and business relations, conspiracy to interfere with our business, libel and slander, and violation of rights under Title IX of the Organized Crime Control Act of 1970 as amended.  The Parties are to establish a consolidated plan of discovery in 2008.  The Company believes it has meritorious defenses to the claims and intends to vigorously defend this lawsuit and to pursue its counterclaims.  On August 5, 2008 the parties conducted a settlement conference and entered into a protective order for the dissemination of information.  Discovery is scheduled to be completed by February 2009.

On January 30, 2008, the Company was named in a lawsuit captioned Kelco Metals, Inc. v. Alternative Construction Technologies, Inc., Circuit Court of Cook County Illinois, 2008L001092.  The lawsuit alleges breach of contract in the amount of $109,197.27.  The Company entered into an agreement with Kelco to acquire metal which was to have been sent to a third party, Precoat Metal Division, for the metal to be galvanized.  Kelco Metals, Inc. demanded prepayment prior to shipping to the Company and held up the metal at Precoat Metal Division.  The Company elected not to pay for the metal as the demand for prepayment was a contradiction to the payment terms.  The Company believes that Kelco subsequently sold the inventory in question for more than the amount of the claim

Two of the Company’s subsidiaries have been sued by vendors (one in each Company) for nonpayment totaling approximately $60,000.  The payment of these outstanding invoices is directly related to these subsidiaries not receiving payment from customers.  In one case, the Company has sued its customer for final payment of approximately $250,000 (which it maintains a reserve for) and has told the vendors associated with this matter that once the Company is paid they will get paid.  As a matter of construction law, each vendor has the right to file a lien against the property for payment.  The Company has filed all appropriate liens.  The total outstanding balance of the lawsuits against the subsidiaries of the Company do not warrant a material effect on the Company’s performance.

ITEM 1A. RISK FACTORS

You should carefully consider the following discussion of various risks and uncertainties.  We believe these risk factors are the most relevant to our business and could cause our results to differ materially from the forward-looking statements made by us.  The following risk factors are not the only risk factors facing our Company.  Additional risks that we do not consider material, or of which we are not currently aware, may also have an adverse impact on us.  Our business, financial condition, and result of operations could be seriously harmed if any of these risks or uncertainties actually occurs or materializes.  In that event, the market price for our common stock could decline, and you may lose all of part of your investment.

The Company is in default on its current indebtedness and if it fails to provide a work-out solution the lenders may foreclose on the Company.

The Company has received default notices from one of its Lenders, Bridgepointe Master Fund, LLC with respect to its secured convertible debentures and Line of Credit Agreement.  The defaults under the Debenture relate to the non-payment of principal payments which were to have commenced on July 1, 2008 and the default under the Line of Credit related to failure to properly fund a lock-box, submission of improper contracts and a cross-default related to the debenture default.  The Company is attempting to work with its lenders to cure these defaults and to either restructure all, or some, of the outstanding debt, or pay down the debt through third party financing.  No assurance can be given that these efforts will prove successful.  If they are not the lenders have the right to foreclose on substantially all of the Company’s assets.

The current business environment of the Company has suffered because of the weakened economy and its relationship with its vendors, creating an environment that has declined operations and created uncertainty in the market.

The Company underwent significant growth in 2006 and 2007 and projected that growth to continue in 2008.  The growth was dependent on three factors; (1) a continued strong economy; (2)  manageable costs of goods; and, (3) supplemented financing support from existing financial partners.  The economy has weakened considerably in the past year and as a result many customers have cancelled or delayed projects.  Despite the downturn, the Company remains optimistic that demand of its “green” products and services will continue to be strong.  Costs of goods, especially steel, have continued to escalate, particularly as a result of increased energy costs.  Finally, the Company’s relationship with its financiers has deteriorated and while the Company is working to rebuild or replace that relationship no assurance can be given that such will be the case.

The Company has been unable to fill the vacancy created by the Chief Financial Officer and the position is currently filled, on an interim basis, by the Company’s Chief Executive Officer, as well as, other key executive positions, creating a shortage in executive manpower that effects the overall operation of the business.

The Company’s CFO resigned on May 9, 2008.  The Company is committed to finding and hiring a qualified CFO in the short term.  In addition, the Company’s CEO has indicated a willingness to resign as CEO in favor of Anthony Francel, the Company’s current COO.  These changes, though desirable at this point, will necessarily cause changes and disruptions to the Company’s business.  In addition, the Company is in need of additional executives in sales, marketing, and investor relations.  Moreover, new Management will require financial commitments which may not be able to be met given the Company’s current financial situation.

If the Company is unable to raise equity capital or negotiate favorable terms with its current convertible debt holders it may be unable to achieve its 2008 objectives.

We incurred substantial growth for the year ended December 31, 2007 and had projected considerable growth in 2008.  The Company has pledged all of its assets to the current convertible debt holders and because of this have subsequently restricted the Company’s ability to secure additional financing. While the Company had secured commitments for additional financing in the first quarter of 2008, the Debenture Holders would not waiver or amend certain rights they held to future financing to allow the Company to complete additional financing. The Company entered into an  unfavorable agreement whereby the Company was forced to issue 1.8M additional warrants, issue two board seats, and pay 13% interest in order to ensure survivability.  Typical manufacturing companies rely heavily on debt to finance growth through inventory financing, purchase order financing, equipment financing, and factoring of receivables, which is currently unavailable to the Company.  The expected growth rate of the Company has suffered due to the lack of funding promised but not delivered.  The Company will require additional capital to meet its goals. In the event the Company is unable to successfully raise the necessary capital it may fail to reach targeted sales or overextend the Company’s obligations or ability to pay. There is no guarantee that we will succeed in obtaining additional financing, or if available, that it will be on terms favorable to us.  The debentures issued in the debt financing in June 2007, and subsequent Letter of Credit issued on May 9, 2008 are secured by all of our assets.  Certain debentures are convertible into common stock, at a fixed price of $4.00 per share; however, until the debentures are paid in full or converted into common stock, all of the Company’s assets have been proffered as collateral.  The maturity date of the debentures is June 30, 2009; however, the Company is required to pay down the principal owed on the debenture at 1/24 of the outstanding balance effective July 1, 2008.  The Company has been unable to meet this obligation.  The debentures and Line of Credit bear interest rates of 10% and 13% per year, respectively.  If the Financiers decide to pursue a default of the payment terms or other provisions of the debentures, there is no assurance that we will able to successfully negotiate new terms favorable to us.  In that event, the lenders may elect to accelerate the payment terms and may exercise their right against the collateral.

If the price of raw materials increases or its availability decreases, it may create a reduction in our capability to produce our product, or increase in the retail panel price making us uncompetitive with conventional building.

The key components to our product are steel and foam.  Steel is a commodity product; therefore the Company continues to seek various suppliers to provide sufficient source and pricing to meet our production schedule and pricing points.  In the current market, steel and foam, the key ingredients in our product, rise and fall in cost, which could affect our abilities to procure enough raw materials based on cash and credit availability to produce enough products to meet demand and sell finished products at a profit. With an increase in raw material pricing, which often fluctuates because of availability, natural disasters, and force majeure, the Company may not maintain adequate cash to procure raw materials to meet current demand and expanded growth. As additional funding is required in the future, obtaining such financing is at the sole discretion of numerous third party financial institutions. Therefore, the Company cannot predict its ability to obtain future financing or the specific terms associated with such agreements. As such, the Company would be required to adjust production schedules based on cash availability and market pricing for its finished products which could therefore reduce production and limit its sales growth potential.  In the event the Company elects to pass on these increases to its customers we may not be able to compete with conventional building.  The Company experienced a 25% cost increase to spot-bid steel pricing in 2007 while maintaining a successful profit ratio.

If we are unable to protect our intellectual property, while maintaining a “first to market” status, will increase competition and competitive pricing that may have an impact on our future growth.

We rely significantly on the protections afforded by patent and trademark registrations that we routinely seek from the United States Patent and Trademark Office (USPTO) and from similar agencies in foreign countries. We cannot be certain that any patent or trademark application that is filed will be approved by the USPTO or other foreign agencies. In addition, we cannot be certain that we will be able to successfully defend any trademark, trade name or patent that we hold against claims from, or use by, competitors or other third parties. Our future success will depend on our ability to prevent others from infringing on our proprietary rights, as well as our ability to operate without infringing upon the proprietary rights of others. We may be required at times to take legal action to protect our proprietary rights and, despite our best efforts, we may be sued for infringing on the patent rights of others. Patent litigation is costly and, even if we prevail, the cost of such litigation could adversely affect our financial condition. If we do not prevail, in addition to any damages we might have to pay, we could be required to stop the infringing activity or obtain a license. We cannot be certain that any required license would be available on acceptable terms, or at all. If we fail to obtain a license, our business might be materially adversely affected. In addition to seeking patent protection, we rely upon a combination of non-disclosure agreements, other contractual restrictions and trade secrecy laws to protect proprietary information. There can be no assurance that these steps will be adequate to prevent misappropriation of our proprietary information or that our competitors will not independently develop technology or trade secrets that compete with our proprietary information.

With only one manufacturing facility and one production line, the Company could lose substantial revenue due to down time if the equipment is damaged and/or the plant suffers from a natural disaster.

The Company relies on one production line to manufacture its products. While a supply of most replacement parts is maintained and regularly scheduled maintenance conducted, the Company has the risk of shutting down if a key processing line component fails. In the third quarter of 2007, the facility was struck by lightning which caused a three week delay in production while waiting on a specific component to be manufactured in California.  This delay adversely affected revenues for the third quarter of 2007.  The component was a minor component, but the time to manufacture a new one was considerable.  To replace the entire proprietary equipment line could take six to nine months, or longer, to design, assemble and have operational. The Company protects its patented process of continuous line manufacturing and as such will not allow a subcontractor to manufacture the ACTech® Panel unless it was in a plant designed and built by the Company.

Our facilities, manufacturing equipment and distribution systems may be subject to catastrophic loss due to fire, flood, hurricane, tornado, earthquake, terrorism or other natural or man-made disasters.  This was evident by two lightning strikes and a subsequent fire which caused minor damages and delays in production. Our corporate office in Florida is located in an area subject to hurricanes and other tropical storms. We believe our insurance policies are adequate with the appropriate limits and deductibles to mitigate the potential loss exposure of our business. We do not have financial reserves for policy deductibles and we do have exclusions under our insurance policies that are customary for our industry, including earthquakes, flood and terrorism. If any of our facilities or a significant amount of our manufacturing equipment were to experience a catastrophic loss, it could disrupt our operations, delay orders, shipments and revenue recognition and result in expenses to repair or replace the damaged manufacturing equipment and facilities not covered by insurance.

The Company has entered into indemnification agreements with the officers and directors and we may be required to indemnify our Directors and Officers, and if the claim is greater than $1,000,000, it may create significant losses for the Company.

We have authority under Section 607.0850 of the Florida Business Corporation Act to indemnify our directors and officers to the extent provided in that statute. Our Articles of Incorporation require the Company to indemnify each of our directors and officers against liabilities imposed upon them (including reasonable amounts paid in settlement) and expenses incurred by them in connection with any claim made against them or any action, suit or proceeding to which they may be a party by reason of their being or having been a director or officer of the company. We maintain officer's and director's liability insurance coverage with limits of liability of $1,000,000. Consequently, if such judgment exceeds the coverage under the policy, the Company may be forced to pay such difference.  We have entered into indemnification agreements with each of our officers and directors containing provisions that may require us, among other things, to indemnify our officers and directors against certain liabilities that may arise by reason of their status or service as officers or directors (other than liabilities arising from willful misconduct of a culpable nature) and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. Management believes that such indemnification provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.  We are subject to claims arising from disputes with employees, vendors and other third parties in the normal course of business.  These risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time. If the plaintiffs in any suits against us were to successfully prosecute their claims, or if we were to settle such suits by making significant payments to the plaintiffs, our operating results and financial condition would be harmed. In addition, our organizational documents require us to indemnify our senior executives to the maximum extent permitted by Florida law. If our senior executives were named in any lawsuit, our indemnification obligations could magnify the costs of these suits.

We may acquire new businesses which fit strategically with our goals which will create dilution to our shareholders and additional cash requirements we cannot meet.

The Company acquired three businesses in 2007 and will continue to seek complementary businesses to acquire in 2008.  Two of the businesses (ACI and ACR) acquired in 2007 created dilution of the company shareholders, but have brought significant opportunities to expand the Company’s business.  With this additional business, the Company has struggled with meeting its cash flow requirements. The typical companies acquired are young companies with considerable contracts they are unable to fulfill or cash flow themselves.  Coupled with our need for increased raw materials, to add on these contracts, and the cash flow needs of the acquired business, the Company will need to look to equity and debt resources to fulfill its obligations.

Future changes in financial accounting standards and other applicable regulations by various governmental regulatory agencies may cause lower than expected operating results and affect our reported results of operations.

Changes in accounting standards and their application may have a significant effect on our reported results on a going forward basis and may also affect the recording and disclosure of previously reported transactions. New standards have occurred and will continue to occur in the future. For example, in December 2004, the Financial Accounting Standards Board issued SFAS No. 123 (revised 2004), as amended, “Share Based Payment” (“SFAS No. 123R”), which requires us to expense stock options at fair value effective January 1, 2006. Under SFAS No. 123R, the recognition of compensation expense for the fair value of stock options reduces our reported net income and net income per share subsequent to implementation; however, this accounting change will not have any impact on the cash flows of our business. Under the prior rules, expensing of the fair value of the stock options was not required and therefore, no compensation expense for stock options was included in reported net income and net income per share in fiscal 2006. The Company issued 100,000 shares of stock options in fiscal 2007, recognizing $24,150 of compensation expense.  Any future issuances of stock options, in addition to the fiscal 2006 issuances, will cause additional compensation expense to be recognized.

The Sarbanes-Oxley Act of 2002 and various new rules subsequently implemented by the Securities and Exchange Commission (“SEC”) and the NASDAQ National Market have imposed additional reporting and corporate governance practices on public companies. Since adoption of these regulations, our legal, accounting and financial compliance costs have increased and a significant portion of management’s time has been diverted to comply with these rules. We expect these additional costs and the diversion of management’s time to continue and to the extent additional rules and regulations are adopted. The diversion or addition of resources may potentially increase over time, with respect to these legal initiatives.

In addition, if we do not adequately continue to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in the future, we may not be able to accurately report our financial results or prevent error or fraud, which may result in sanctions or investigation by regulatory authorities, such as the SEC. Any such action could harm our business, financial results or investors’ confidence in our company, and could cause our stock price to fall.

The nature of our businesses exposes us to the risk of litigation and liability under environmental, health and safety and product liability laws.

Certain aspects of our businesses involve risks of liability. In general, litigation in our industry, including class actions that seek substantial damages, arises with increasing frequency. Claims may be asserted under environmental, labor, health and safety or product liability laws. Litigation is invariably expensive, regardless of the merit of the plaintiffs’ claims. We may be named as a defendant in the future, and there can be no assurance that regardless of the merit of such claims, we will not be required to make substantial settlement payments in the future.

If we do not effectively manage our credit risk or collect on our accounts receivable, it could have a material adverse effect on our operating results.

We generally sell to qualified customers on a 30-day payment term; however, our average collection time is 49 days.  We perform credit evaluation procedures on our customers on each transaction and require security deposits or other forms of security from our customers when a significant credit risk is identified.   The Company expects to begin offering terms on purchases in an effort to increase sales.  As the Company exposes itself to greater risks we will have to further evaluate accounts receivable and increase our reserves for bad debt, as applicable.

In 2006, the Company wrote off a substantial amount of aged accounts receivable.  The Company has implemented a policy of filing Notice to Owners (“NTO”) on each property in which it produces product for to alleviate the inability to collect.  However, if a customer fails to pay, there could be considerable time between the need to pay our vendors and the receipt of our final payment.  ACP maintains more than $150,000 in immediate payables on a contract in which it is owed $254,000 and may be required to use legal remedies to collect.  The Company has engaged counsel to collect the remaining balance.  Failure to manage our credit risk and receive timely payments on our customer accounts receivable may result in the write-off of customer receivables. If we are not able to manage credit risk issues, or if a large number of customers should have financial difficulties at the same time, our credit losses would increase above historical levels. If this should occur, our results of operations may be materially and adversely affected.

Failure by third parties to supply our raw materials or deliver our product to our specifications or on a timely basis may harm our reputation and financial condition.

We are dependent on third parties to provide steel, foam, and other building materials even though we are able to purchase products from a variety of third-party suppliers. In the future, we may be limited as to the number of third-party suppliers for some of our products. Currently, we do not have any long-term purchase contracts with any third-party supplier. In the future, we may not be able to negotiate arrangements with these third parties on acceptable terms, if at all. If we cannot negotiate arrangements with these third parties to provide our raw materials to our specifications or in a timely manner, our reputation and financial condition could be harmed.  In addition, specific requirements exist for delivery of raw materials that can cause significant damage and delays if not properly serviced during the transportation.  While financial cost is insured by the carrier, lost time and reputation may suffer decreasing customer satisfaction and thwarting future sales.

If we are not able to anticipate and mitigate the risks associated with operating internationally, as planned, there could be a material adverse effect on our operating results.

Currently, we have no significant revenue derived from foreign interests.  The Company projected significant international growth in 2008 in various construction segments including commercial, affordable housing, military, and education.  The Company is currently negotiating in more than ten different countries and has made an impact in the international communities through its various United Nations invitations to present our products and solutions.  Over time, we anticipate the amount of international business may increase significantly if our focus on international market opportunities continues. Doing business in foreign countries does subject the Company to additional risks, any of which may adversely impact our future operating results, including:

• international political, economic and legal conditions including tariffs and trade barriers;

• our ability to comply with customs, import/export and other trade compliance regulations of the countries in which we do business, together with any unexpected changes in such regulations;

• difficulties in attracting and retaining staff and business partners to operate internationally;

  • language and cultural barriers;

• seasonal reductions in business activities in the countries where our international customers are; located;

• integration of foreign operations; and

• potential adverse tax consequences.

• potential foreign currency fluctuations.

If the Company’s anti-takeover measures are inadequate, the current control over the Company by management may be lost, creating a negative image on the Company’s position in the “Green” market.

On August 14, 2008 a member of the Board of Directors appointed by the debenture holders called a special meeting of the Board of Directors to seek the immediate removal of the Chairman and CEO.  The current management team has been with the Company since inception.  It understands the current market conditions, the “Green” environment, and the strategic and operational goals of the Company.  Current management maintains good relationships with its vendors and customers, despite the inadequacies of funding.  In the event management loses control of the operation of the Company, based upon its current licensures, the Company will be faced with a vacuum of leadership, knowledge, ability to conduct business, product de-licensure, and other historical information.  The Company would be required to expend cash and time in order to replace what it would lose with current management.  The loss of faith with the vendors, in which some relationships extend for many years, would be lost.  In addition, the customers would seek additional SIP manufacturers for product during this changeover and the Company may not be able to win their business back in the future.  The Company may not recover from such a change of control at this time.

SPECIFIC RISKS RELATED TO OUR MANUFACTURING OF STRUCTURAL INSULATED PANELS

Continued decline in school operations maintenance funding; and new facility funding in the state of Florida could cause the demand for our ACTech® Panel to decline, which could result in a reduction in our revenues and profitability.

For two consecutive years, sales of our SIPs to contractors building modular portable classrooms for the Florida public school districts for use as portable classrooms, restroom buildings, and administrative offices for kindergarten through grade twelve has declined. Funding for public school facilities is derived from a variety of sources including the passage of both statewide and local facility bond measures, developer fees and various taxes levied to support school operating budgets. Many of these funding sources are subject to financial and political considerations, which vary from district to district and are not tied to demand. Historically, we have benefited from the passage of facility bond measures and believe these are essential to our business. While all forecast reports believe 2008 to be a substantial year in the school facility market, there is no guarantee that this business sector will return to its historical 2005 levels.

To the extent public school districts’ funding is reduced for the rental and purchase of modular facilities, our business could be harmed and our results of operations negatively impacted. We believe that interruptions or delays in the passage of facility bond measures, changes in legislative or educational policies at either the state or local level including the contraction or elimination of class size reduction programs, a lack or insufficient amount of fiscal funding, a significant reduction of funding to public schools, or changes negatively impacting enrollment may reduce the rental and sale demand for our educational products and result in lower revenues and profitability.

A significant reduction of construction due to economic downturns, population growth variations and/or other definable effects on the construction industry could cause the demand for our construction solutions to decline, which could result in a reduction in our revenues and profitability.

The US Market has magnified the housing market crisis to disproportionate levels. As such, the housing market has created a negative spin on all construction and related product suppliers, even though the commercial market and “green” building market has witnessed considerable and consistent growth.  While less than 25% of our Company’s SIP business is in the housing market, this negative spin has created indecisiveness within our customers which has hampered our growth.

The US Market is projecting a 60% growth in “green” building materials and the Structural Insulated Panel Association (SIPA) is projecting an increase from 1.5% to 5% of all housing to be built with SIPs within the next five years.  To the contrary, the US Market is projecting a slowdown in commercial construction in 2008, but is expecting a massive influx of school related contracts, while the housing market continues to struggle.  Each of these trends, forecasts, and potential markets will have a direct impact on our success and failures.  The Company’s inability to recognize which information is correct, and utilize this information to develop a roadmap for future success could impede our ability to increase profits.

Public policies that create demand for our products and services may change, stall in Congress or State Legislation reducing leverage to enforce change thereby decreasing sales.

Florida has passed legislation to limit the number of students that may be grouped in a single classroom for certain grade levels. School districts with class sizes in excess of these limits have been and continue to be a significant source of demand for modular classrooms using the ACTech® Panel. The educational priorities and policies were stalled in 2007, therefore demand for our products and services declined.  While legislation still dictates the need for additional modular classrooms, and with the ACTech® Panel System featured in more than 1,300 modular facilities within the state of Florida, we may not experience the historical growth levels of 2005; therefore, we may not grow as quickly as or reach the levels that we anticipate.

Similar to conventionally constructed buildings, the modular building industry, including the manufacturers and lessors of portable classrooms, are subject to evolving regulations by multiple governmental agencies at the federal, state and local level. This oversight includes but is not limited to governing code bodies, environmental, health, safety and transportation. Failure by our customers to comply with these laws or regulations could impact our business.  Compliance with building codes and regulations have always entailed a certain amount of risk as municipalities do not necessarily interpret these building codes and regulations in a consistent manner, particularly where applicable regulations may be unclear and subject to interpretation. Many aspects of the construction and modular building industry have developed “best practices” which are constantly evolving.

The inability to get our product and services listed as a mandated “Green Product”, such as the State of Florida Climate Action Team Approved Green Building Product Listing, may limit opportunities for growth or restrict access to certain states.

With 22 states and Washington, D.C. currently enforcing “Green Laws”, laws that define the use of “green” building materials, and many other states considering the passage of “Green Laws”, our inability to get our product listed as an approved “Green Product” in each state may restrict growth for some government contracts.  Three states (Connecticut, Wisconsin and Illinois) have set up commissions to draft “green” building legislation and regulations.  Four states (Nevada, New Mexico, Virginia, and Maryland) and Washington, D.C. require state and/or state-funded buildings to be built to a “green” building standard and offer incentives for compliance.  Eleven states (Washington, California, Arizona, Colorado, Maine, Massachusetts, Rhode Island, New Jersey, South Carolina, Michigan, and Florida) require state-funded public and educational building to be built to the “green” standard.

We face strong competition in our structural insulated panel markets on a region-by-region basis which may provide resistance to the Company’s ability to become a national leader in structural insulated panels manufacturing.

The structural insulated panel industry is fragmented and highly competitive in our states of operation and we project it to remain the same. We compete with three types of competitors; (i) conventional builders, (ii) wood-based SIP manufacturers, and (iii) other steel-skin SIP manufacturers.  As the housing market has declined, many conventional builders are attempting to enter into the commercial marketplace; thus creating increased competition for use of our product.  As more and more people decide to use alternative methods of construction, the SIP industry is poised to gain significant growth in this market.  The boom has been projected for years by industry experts.  As such, many wood-based SIP manufacturers have been gearing up for the growth opportunities creating an influx of potential candidates to compete with for new building styles.  The competitive market in which we operate may prevent us from raising sales prices to pass any increased costs on to our customers. We compete on the basis of a number of factors, quality, price, service, reliability, appearance, functionality, and delivery times. We believe we may experience pricing pressures in our areas of operation in the future as some of our competitors seek to obtain market share by reducing prices.

In the event a defect were to arise from our manufacturing of the ACTech® Panel, our warranty costs would increase and could cause the Company to go into bankruptcy.

Sales of structural insulated panels are typically covered by warranties. We provide a one year warranty on the ACTech® Panel.  Historically, our warranty costs have not been significant, and we monitor the quality of our products closely. If a defect were to arise in the manufacturing of our structural insulated panel at our facility, we may experience increased warranty claims. Such claims could disrupt our sales operations, damage our reputation and require costly repairs or other remedies, negatively impacting revenues, costs, and operating income, even to the point, if the defects were universal, a complete shutdown of the operation and a need to file for protection under bankruptcy laws.

SPECIFIC RISKS RELATED TO OUR DEVELOPMENT BUSINESS

Economics and cyclical downturns in the construction industry may result in periods of low demand for our services resulting in the reduction of our operating results and cash flows.

The Company currently owns three development division subsidiaries located in Newnan, Georgia, Cleveland, Tennessee, and Bradenton, Florida. The Company maintains an office in Cleveland, Tennessee, but has no office facilities in Newnan, Georgia or Bradenton, Florida. The revenues are derived from providing construction solutions to a broad range of companies, developers and individuals. Historically, the construction industry has been cyclical and has experienced periodic downturns, which have a material adverse impact on the industry’s demand for construction.  The Company is currently developing a 59 home subdivision in Cleveland, Tennessee.  If the Company does not sell these homes as they are built, it will directly impact our cash flow and profitability.

In addition, the severity and length of any downturn on an industry may also affect overall access to capital, which could adversely affect our customers. During periods of reduced and declining demand for construction material and/or solutions, we are exposed to additional risk from reduced revenue and may need to rapidly align our cost structure with prevailing market conditions while at the same time motivating and retaining key employees. While the market demand for construction related products and/or solutions in a significant portion of the areas in our focus, especially with the devastation due to hurricanes in Florida and Louisiana in 2004 and 2005, respectively, no assurance can be given regarding the length or extent of the recovery, and no assurance can be given that our rates, operating results and cash flows will not be adversely impacted by the reversal of any current trends or any future downturns or slowdowns in the rate of capital investment in this industry.

Significant increases in construction supplies, subcontractors and labor costs could increase our cost of construction, which would increase our cost of goods sold and reduce our profitability.

We incur labor costs, purchase construction supplies, and employ subcontractors. Generally, increases in labor, construction supplies, and subcontractors will also increase the cost of our structure. During periods of rising prices for labor, construction supplies or subcontractor services, and in particular, when the prices increase rapidly or to levels significantly higher than normal, we may incur significant increases and incur higher cost of goods sold that we may not be able to recoup from our customers, which would reduce our profitability.

In the event the Company is unable to pay the liabilities associated with Alternative Construction by Ionian, Inc., and Alternative construction by Revels, Inc., the previous owners, who have personal guarantees on those liabilities, has the right to repurchase their respective business at par value.

ACI and ACR have represented a significant portion of revenue for the Company.  In the event the Company is unable to keep current on the liabilities associated with ACI and ACR, the previous owners have the right to repurchase their respective businesses by paying par value (or $0.0001) for he stock they were issued as part of the purchase.  This would reduce the revenue, assets, and liabilities of the Company, which would have a negative impact on the overall business development division.  In addition, the previous owners, maintains the residential and commercial construction license in which the Company utilizes to conduct its business.

In the event the Company loses key employees that maintain contractor licenses, the Company would not be able to perform on the contracts it has entered into.

The Company relies on the personal contractor’s license of Dave Revels, Steve Rechnsteiner, and James Hawkins in which to conduct its business in Florida and Tennessee. In the event these individuals determine to leave the Company, the Company will not be able to perform on the current contracts it has in place.  The current value of all contracts for construction is $3.4M.

SPECIFIC RISKS RELATED TO OUR ANCILLARY SERVICES

Company management may choose to acquire strategic alliances and/or partners who may create long-term beneficial growth but would adversely affect short-term gains.

The Company projects strategic alliances, joint ventures, and acquisition candidates in the “green” and “clean tech” industries.  Through these alliances, the Company has the opportunity to provide various consulting services which promotes revenue and furthers the Company’s message of operating in the “green” world.  Company management will determine at the appropriate times whether these alliances are beneficial to remain a third party or to be acquired, either wholly or partially.

The Company relies partially on outside consultants for architectural and engineering services that may put the Company at further risk and liability.

The Company requires its professional consultants to provide certification and license documentation to include named insurance from claims.  As the Company is the contracted entity it faces additional liability that it may have to defend in the event of a faulty design.

The Company’s subsidiary, ACCS, has a significant receivable from Atlan International Holding, Inc., currently known as Solar 18, Corp, that currently has not paid according to schedule, and if not collected would represent a considerable variance to the outstanding Accounts Receivable.

The Company has a short-term receivable of $1,000,000 and a long-term receivable of $1,000,000 from Atlan.  This constitutes 28.6% of the consolidated accounts receivable, net and 16.0% of the consolidated total assets.  The Company would be negatively affected if Atlan were unable to pay the receivable timely and/or not pay at it in its entirety.  The Company has strategically protected itself as it has three options in the case of non-payment.  First, the Company could receive the Atlan stock which is collateral to the receivable.  This would include Atlan’s ongoing contracts and assets.  The other options include the Company assisting Atlan in obtaining additional financing to enable the payment to the Company and/or the Company has the option to lien the royalties of the joint venture payments to Atlan until the receivable is paid in full. In the case of non-payment, it could be costly to the Company to negotiate the settlement which would restrict the Company’s future cash flow. The Company has been requested, by Atlan’s financiers to convert its outstanding receivable into a preferred equity of Solar 18 in conjunction with their capital raise.  See Note 10 – Subsequent Events, to financial statements.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

On February 28, 2008 CAMOFI Master Fund LDC converted $160,000 of the debenture into equity in exchange for 40,000 shares.  In addition, CAMHZN Master Fund LDC converted $40,000 of the debenture into equity in exchange for 10,000 shares.

On March 3, 2008 the Company issued 73,171 of its common stock for $300,000.  The conversion price was $4.40 per share.

The common shares underlying the debentures and warrants were registered for resale by the Company on February 8, 2008.  Because the registration statement was not declared effective within 120 days of the closing of the transaction, the Company was assessed a penalty by the Debenture purchasers and issued 200,000 additional shares to them as compensation on May 7, 2008.

On May 20, 2008 the Company issued 80,000 shares of its common stock to various principals of Dinosaur Securities, LLC in conjunction with the Line of Credit it entered into on May 9, 2008.  In addition, the Company issued 1,800,000 warrants to various lenders at a purchase price of $2.50 per share.

On May 23, 2008 the Company issued 100,000 shares to JP Turner & Associates, LLC.

On June 17, 2008 the Company cancelled 350,000 shares issued to Bruce Harmon.  The cancellation of the stock was directly associated with the cancellation of a $262,500 promissory note owed by Bruce Harmon to the Company in connection with his resignation as a member of the Board of Directors.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

On July 19, 2008 BridgePointe Master Fund, one of the lenders, notified the Company that it did not intend to fund any additional draw-downs under the line of credit until all current defaults had been corrected.  On July 31, 2008 BridgePointe Master Fund notified the Company that it was in default in its debenture and that it must cure such defaults within five (5) days.  On August 1, 2008 BridgePointe Master Fund notified the Company that it was in default in its line of credit and had five (5) days to cure it.  The terms of the debentures called for principal amortization there under to commence on July 1, 2008, and monthly thereafter at a rate of 1/24 per month, or $90,500, with a balloon payment due July 1, 2009 for any outstanding remaining balance.  The Company is unable to make these payments without access to additional outside funding or in connection with draw-downs under the line of credit.  The Company is working with its lenders and outside parties to reach agreement upon a satisfactory restructuring of this debt or payments to cure any defaults.  While the Company is hopeful that such a resolution can be achieved in the short term, if it is not, at least one lender has notified the Company that it will commence collection efforts, to include foreclosure on assets securing the debenture.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

In March 2008, by written consent of a majority of the shareholders, as afforded the Company in its Bylaws and Articles of Incorporation, as amended, elected to allow the issuance of more than 20% of the outstanding common shares in the event the Board of Directors and management determined, in its discretion, the need to raise additional capital.

ITEM 5.   OTHER INFORMATION

The Company requested a legal opinion concerning its amended bylaws incorporated on October 23, 2007 and the subsequent increase of board members authorized on March 3, 2008.  On August 5, 2008 the Company received a legal opinion from its Florida counsel that invalidated the amended bylaws of October 23, 2007, reaffirmed that the currently authorized bylaws are the bylaws originally incorporated on October 24, 2004, and confirmed the capacity of the Board of Directors at six (6) members.  In addition, the attorney identified the appropriate procedures needed to correct the unconstituted board of directors which was created by the addition of the two appointees from the financiers.  The Board of Directors is only authorized six (6) board members as defined in the Company’s corporate governance as ratified and approved by the Board of Directors, but at the time had eight (8) board members.  Subsequently, Jerry Paul and Todd Tkachuk resigned from the board of directors.  As the only independent Board Member, Willis Kilpatrick serves as the Audit Committee and Audit Committee Chairperson.

ITEM 6.   EXHIBITS

Exhibits

No.	Description
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

      Alternative Construction Technologies, Inc.

Date: August 19, 2008    

By: /s/ Michael W. Hawkins

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

      Chief Executive Officer

      (Principal Executive Officer)

Date: August 19, 2008    

By: /s/ Michael W. Hawkins

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

      Interim Chief Financial Officer (Principal

      Accounting and Financial Officer)