First National Energy Corp. - FORM 10-Q/A

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UNITED STATES

SECURIITES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q /A

(Mark One)

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

For the quarterly period ended March 31, 2010.

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

For the transition period from ____________ to ________________.

Commission File Number: 333-62588

FIRST NATIONAL ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		66-0349372
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1551 Second Street, Sarasota, Florida 34236

(Address of principal executive offices)

(416) 918-6987

(Registrant’s telephone number, including area code)

(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þYes oNo

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	o	Accelerated filer	o
Non-accelerated filer	o (do not check if a smaller reporting company)	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o Noþ

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 12, 2010, there were 99,665,228 common shares issued and outstanding.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

First National Energy Corporation

(Formerly First National Power Corporation)

(A Development Stage Company)

Consolidated Financial Statements (unaudited)

For the 3 Month period ended March 31, 2009

Amounts expressed in US Dollars

Index

Consolidated Interim Balance Sheets as at March 31, 2010 (unaudited) and December 31, 2009 (audited)			3

Consolidated Interim Statements of Operations for the 3 month periods ended March 31, 2010 and March 31, 2009 for the cumulative period since inception (unaudited)			4

Consolidated Interim Statements of Cash Flows for the 3 month periods ended March 31, 2010 and March 31, 2009 and for the cumulative period since inception (unaudited)			5

Consolidated Interim Statements of Changes in Stockholders’ Deficiency for the period since inception (unaudited)			6-8

Condensed Notes to Consolidated Interim Financial Statements (unaudited)			9 - 12

FIRST NATIONAL ENERGY CORPORATION
(Formerly First National Power Corporation)
(A Development Stage Company)
Consolidated Interim Balance Sheets
As of March 31, 2010 and December 31, 2009
(Amounts expressed in US Dollars)

		March 31			December 31
		2010			2009

		$			$
ASSETS
	CURRENT ASSETS
	Cash		28,003			36,730
			28,003			36,730

	License for SWEG technology, net of amortization		2,279,577			1,725,967

			2,307,580			1,762,697


LIABILITIES
	CURRENT LIABILITIES
	Accounts payable and accrued liabilities		9,500			14,568
	Payable to Boreas Research for SWEG license		600,000
	Loans from shareholders		258,313			258,313
			867,813			272,881

Going Concern (Note 2)

STOCKHOLDERS’ EQUITY (DEFICIENCY)

	CAPITAL STOCK		99,665			99,665
	ADDITIONAL PAID-IN-CAPITAL		2,185,801			2,185,801
	DEFICIT, ACCUMULATED DURING THE DEVELOPMENT STAGE		(845,698	)		(795,650	)
			1,439,767			1,489,816

			2,307,580			1,762,697

The Notes form an integral part of the consolidated interim financial statements

(Amounts expressed in US Dollars)

				3 Months			3 Months
	Cumulative			ended			ended
	Since			March 31			March 31
	Inception			2010			2009
		$			$			$
OPERATING EXPENSES

Interest Income		(6,916	)		(12	)		(34	)

Forgiveness of accounts payable and loans		(47,394	)
General and administrative expenses		447,317			3,670			10,237
Loss on Foreign Exchange		580
Amortization		176,028			46,390			-
Project development costs		272,857
Interest Expense		3,226			-			-
		845,698			50,048			10,203


NET LOSS AND COMPREHENSIVE LOSS		(845,698	)		(50,048	)		(10,203	)

Net loss per share, basic and diluted				$	(0.00	)	$	(0.01	)

Weighted average common shares outstanding					99,665,228			765,228

The Notes form an integral part of the consolidated interim financial statements

FIRST NATIONAL ENERGY CORPORATION
(Formerly First National Power Corporation)
(A Development Stage Company)
Consolidated Interim Statements of Cash Flows
For the 3 Month Periods ended March 31, 2010 and March 31, 2009 and the cumulative period since inception
(Amounts expressed in US Dollars)

				3 Months			3 Months
	Cumulative			ended			ended
	Since			March 31			March 31
	Inception			2010			2009
		$			$			$
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss	$	(845,698	)	$	(50,048	)	$	(10,203	)
Adjustments for items not affecting cash
Amortization		176,028			46,390
Shares issued for services rendered		332,390			-			-
Forgiveness of accounts payable and loans		(47,394	)
Increase (decrease) in accounts payable
and accrued liabilities		13,498			(5,069	)		(9,605	)

Net cash used in operating activities		(371,176	)		(8,727	)		(19,808	)

CASH FLOWS FROM FINANCING ACTIVITIES

Loans from Shareholders		301,708			-
Proceeds from sale of capital stock		97,471

Net cash provided by financing activities		399,179			-			-

NET INCREASE (DECREASE) IN CASH		28,003			(8,727	)		(19,808	)

Cash, beginning of period		-			36,730			85,122

CASH, END OF PERIOD		28,003			28,003			65,314

INCOME TAXES PAID		-			-			-

INTEREST PAID		3,226			-			-

NON-CASH TRANSACTIONS - PURCHASE OF SWEG TECHNOLOGY FOR SHARES		1,855,605			-			-
PURCHASE OF SWEG TECHNOLOGY BY SUBSIDIARY FOR NOTE PAYABLE		600,000			600,000			-

The Notes form an integral part of the consolidated interim financial statements

FIRST NATIONAL ENERGY CORPORATION

(Formerly First National Power Corporation)

(A Development Stage Company)

Consolidated Interim Statements of Changes in Stockholders’ Equity (Deficiency)

From Inception until March 31, 2010

(Amounts expressed in US Dollars)

									Deficit
			Common				Additional		accumulated
	Common		Stock		Common		Paid-In		during the			Total
	Stock		Number of		Stock		Capital		development			Shareholders'
	Amount		Shares		Subscribed		(Discount)		stage			Equity
	$				$		$		$			$
Balance at November 16, 2000
Issuance of common stock for cash		100		100,000				900					1,000
Net Loss for the Period										(968	)		(968	)

Balance as of December 31, 2000		100		100,000		-		900		(968	)		32

Issuance of stock for cash		400		400,000				3,600					4,000
Issuance of stock for cash		700		700,000				6,300					7,000
Issuance of stock for cash		850		850,000				7,650					8,500
Currency Translation								100					100
Net Loss for the Year										(23,954	)		(23,954	)

Balance as of December 31, 2001		2,050		2,050,000		-		18,550		(24,922	)		(4,322	)

Expiration of recission offer for
sale of stock		64		63,536				6,290					6,354
Net Loss for the Year										(26,047	)		(26,047	)

Balance as of December 31, 2002		2,114		2,113,536		-		24,840		(50,969	)		(24,015	)

The Notes form an integral part of the consolidated interim financial statements

FIRST NATIONAL ENERGY CORPORATION

(Formerly First National Power Corporation)

(A Development Stage Company)

Consolidated Interim Statements of Changes in Stockholders’ Equity (Deficiency)

From Inception until March 31, 2010

(Amounts expressed in US Dollars)

Stock split 5:1	8,454	8,454,144			(8,454	)			-
Shares issued for services rendered	200	200,000			79,800				80,000
Net Loss for the Year							(107,245	)	(107,245	)

Balance as of December 31, 2003	10,768	10,767,680	-		96,186		(158,214	)	(51,260	)

Stock split 7:1	64,606	64,606,080			(64,606	)			-
Shares issued for services rendered	30	30,000			15,870				15,900
Shares subscribed			146		70,371				70,517
Shares issued for services rendered	44	43,000			9,956				10,000
Net Loss for the Year							(75,414	)	(75,414	)

Balance as of December 31, 2004	75,448	75,446,760	146		127,777		(233,628	)	(30,257	)

Shares issued for services rendered	830	830,000			193,160				193,990
Net Loss for the Year							(208,886	)	(208,886	)

Balance as of December 31, 2005	76,278	76,276,760	146		320,937		(442,514	)	(45,153	)

Net Loss for the Year							(32,962	)	(32,962	)

Balance as of December 31, 2006	76,278	76,276,760	146		320,937		(475,476	)	(78,115	)

Net Loss for the Year							(30,760	)	(30,760	)
Issue shares bought under subscription	146	146,000	(146	)					-

Balance as of December 31, 2007	76,424	76,422,760	-		320,937		(506,236	)	(108,875	)

The Notes form an integral part of the consolidated interim financial statements

FIRST NATIONAL ENERGY CORPORATION

(Formerly First National Power Corporation)

(A Development Stage Company)

Consolidated Interim Statements of Changes in Stockholders’ Equity (Deficiency)

From Inception until March 31, 2010

(Amounts expressed in US Dollars)

Shares issued for services rendered	100		100,000			400			500
Net Loss for the period							(78,645	)	(78,645	)

Balance as of December 31, 2008	76,524		76,522,760		-	321,337	(584,881	)	(187,020	)


Reverse Stock split 1:100	(75,759	)	(75,757,532	)		75,759			-
Shares issued for services rendered	100		100,000			31,900			32,000
Purchase of SWEG license for shares	98,800		98,800,000			1,756,805			1,855,605
Net Loss for the Year							(210,769	)	(210,769	)

Balance as of December 31, 2009	99,665		99,665,228		-	2,185,801	(795,650	)	1,489,816

Net Loss for the Year							(50,048	)	(50,048	)

Balance as of March 31, 2010	99,665		99,665,228		-	2,185,801	(845,698	)	1,439,768

The Notes form an integral part of the consolidated interim financial statements

First National Energy Corporation

(Formerly First National Power Corporation)

(A Development Stage Company)

Condensed Notes to the Consolidated Interim Financial Statements

For the 3 months ended March 31, 2010 (unaudited)

Amounts expressed in US Dollars

NOTES TO INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of all recurring accruals considered necessary for fair presentation) have been included as necessary in order to make the financial statements not misleading. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2010. Interim financial statements should be read in conjunction with the Company’s annual audited financial statements.

1. GENERAL

a) Description of the Business

First National Energy Corporation (the Company) was incorporated in the State of Delaware on November 16, 2000, with the name Capstone International Corporation. On March 28, 2004, the Company changed its name to First National Power Corporation. On February 12, 2009, the Company relocated its charter to the State of Nevada and changed its name to First National Energy Corporation. As part of reorganization, the Company increased its authorized capital to 300 million common shares and effected a 100 for 1 reverse stock split of its issued and outstanding shares of common stock. The accompanying financial statements reflect all share data based on the 100 for 1 reverse common stock split.

The Company’s business purpose is the provision of wind-driven solutions for power generation. Current projects for the Company are the completion of power generation projects from supplemental wind generation technologies.

b) Purchase of Technology License

On April 20, 2009, the Company entered into a preliminary letter of intent with Boreas Research Corporation (“Boreas”), a Florida corporation, pursuant to which the Company would acquire a territorial license to certain rights in alternative energy technology of Boreas, in exchange for a quantity of newly issued common shares of the Company. Such letter of intent was superseded by a Technology License and Stock Purchase Agreement (the “Agreement”) between the Company and Boreas that was consummated on May 25, 2009 (the “Closing”), at which time the Company issued the stockholders of Boreas 98,800,000 new restricted and unregistered common shares of the Company and agreed to pay certain future royalties to Boreas from net revenues realized by the Company from the technology license. The consideration issued in the transaction was determined as a result of arm’s-length negotiations between the parties.

The preliminary letter of intent was reported by the Company on form 8-K to the Securities and Exchange Commission (“SEC”) on April 21, 2009, and the Agreement was annexed to an information statement on form 14-C filed with the SEC in preliminary and definitive forms on April 22, 2009 and May 4, 2009, respectively. The definitive information statement was mailed to the shareholders of the Company on May 4, 2009.

First National Energy Corporation

(Formerly First National Power Corporation)

(A Development Stage Company)

Condensed Notes to the Consolidated Interim Financial Statements

For the 3 months ended March 31, 2010 (unaudited)

Amounts expressed in US Dollars

The Company obtained written consent to the Agreement and the transaction from the holders of 55.82% of its issued and outstanding shares of common stock in lieu of a meeting of stockholders.

On May 14, 2009, the Company and Boreas amended the Agreement by making and entering into a First Amendment of Technology License and Stock Purchase Agreement (the “Amendment”), pursuant to which (1) Boreas elected, as authorized by the Agreement, to cause the new restricted and unregistered common shares of the Company due to Boreas at the Closing to be issued to the stockholders of Boreas, and (2) the Company and Boreas agreed to reduce the number of new restricted and unregistered common shares of the Company to be issued at the closing of the transaction, from 98,915,000 shares to 98,800,000 shares.

In exchange for the Company acquiring the technology license from Boreas at the Closing pursuant to the Agreement (as amended by the Amendment), the shareholders of Boreas received an aggregate of 98,800,000 new restricted and unregistered common shares of the Company's common stock. Accordingly, the Boreas Shareholders now own 99.13% of the Company's 99,665,228 outstanding shares. No finder’s fees were paid or consulting agreements entered into by the Company in connection with the transaction.

The Company has valued the technology license received from Boreas at the Closing on the books of the Company at $1,855,605 after consulting with an outside valuation expert.

Also upon the Closing, Mr. Peter Wanner, then the sole member of the Company’s board of directors, appointed Douglas Lindeblom and Gianni Caputo to vacant positions on the Company’s board of directors, and the new board of directors, as so constituted, elected the following officers:

Douglas Lindeblom - Chairman, Chief Executive Officer and President

Peter Wanner - Chief Operating Officer, Treasurer and Chief Financial Officer

Gianni Caputo - Vice President and Secretary

Prior to the transaction, there were no material relationships between the Company and Boreas, between Boreas and the Company’s affiliates, directors or officers, or between any associates of Boreas and the Company’s officers or directors. All of the Company’s transaction liabilities were settled on or immediately following the Closing.

Upon the Closing on May 25, 2009, the Company was no longer deemed to be a "shell company" as defined in Rule 12b-2 under the Securities Exchange Act of 1934 (the "Exchange Act"). Accordingly, the Company filed an amended current report on Form 8-K/A with the SEC on May 26, 2009, setting forth the information that would be required if the Company were filing a general form for registration of securities on Form 10 under the Exchange Act.

c) Further Purchase of Technology License

On March 22, 2010, Pavana Power Corporation, a Nevada corporation, the Company’s wholly-owned subsidiary, acquired an exclusive, territorial 25 year license for the Republic of India (“India”), from Boreas Research Corporation (‘Boreas”, the stockholders of whom hold controlling interests in the Company), pursuant to which the Company’s subsidiary acquired technology rights for India in the technology of Boreas that maximizes the energy productivity of existing wind turbines by capturing energy that flows through and underneath existing wind turbine systems. The consideration due from the Company’s subsidiary to Boreas for the license is a deferred cash payment of $600,000, and a future royalty equal to 5% of the subsidiary’s “EBITDA” (revenues before interest, taxes, depreciation and amortization) from exploitation of the acquired license. The transaction was measured at the exchange amount which is the amount agreed upon between the related parties.

First National Energy Corporation

(Formerly First National Power Corporation)

(A Development Stage Company)

Condensed Notes to the Consolidated Interim Financial Statements

For the 3 months ended March 31, 2010 (unaudited)

Amounts expressed in US Dollars

2. GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America and applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not generated any revenues from its planned principal operations through March 31, 2010 has recorded losses since inception, has negative working capital, has yet to achieve profitable operations and expects further losses in the development of its business. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

3. BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of First National Energy Corporation and its wholly-owned subsidiary Pavana Power Corporation. All material inter-company amounts have been eliminated.

4. LICENSE FOR SWEG TECHNOLOGY

	2010						2009
	Cost		Accumulated Amortization		Net Book Value		Net Book Value

North American Technology License	$	1,855,605	$	176,028	$	1,679,577	$	1,725,967
Indian Technology License	$	600,000	$	-	$	600,000	$	-
	$	2,455,605	$	176,028	$	2,279,577	$	1,725,967

Amortization for the next 5 years is estimated to be as follows:

2010	$	230,561
2011		245,561
2012		245,561
2013		245,561
2014		245,561
	$	1,212,805

First National Energy Corporation

(Formerly First National Power Corporation)

(A Development Stage Company)

Condensed Notes to the Consolidated Interim Financial Statements

For the 3 months ended March 31, 2010 (unaudited)

Amounts expressed in US Dollars

5. SUBSEQUENT EVENT

On April 12, 2010, Pavana Power Corporation, a wholly-owned subsidiary of the Company, entered into a common stock and warrant purchase agreement whereby the purchaser has subscribed for 1,000,000 units (consisting of one common share and one warrant) of the subsidiary at a price of $1 per unit. On April 14, 2010, payment of $100,000 was received pursuant to the subscription of these units.

Page

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this annual report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to consummate a merger or business combination, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this annual report in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Description of Business

Business Development

First National Energy Corporation (the “Registrant”) was incorporated as Capstone International Corporation on November 16, 2000, in the state of Delaware, and has a class of shares registered with the Securities and Exchange Commission on Form SB-2 as SEC File No. 333-62588, filed on June 8, 2001. The Registrant’s name was changed to “First National Power Corporation” on January 28, 2004, and was changed again to “First National Energy Corporation” on February 12, 2009, at which time the Registrant effected a reverse stock split, adopted a holding company structure, and relocated its corporate charter from Delaware to Nevada as part of the reorganization described in the next succeeding paragraph.

As described in the definitive information statement on Form DEF 14-C filed with the Securities and Exchange Commission on December 22, 2008, and pursuant to the approval of the Registrant’s board of directors and a majority of its stockholders, on February 12, 2009, the Registrant effected a reorganization pursuant to that certain Agreement and Plan of Merger to Form Holding Company, dated as of December 10, 2008 (a true and complete copy of which is included in the Form DEF 14-C information statement described above), which had the effect of (1) implementing a reverse stock split of its issued and outstanding common shares at the rate of 100 to 1, thereby reducing the number of issued and outstanding common shares from 76,522,760 to 765,228, with no effect on the number of authorized common shares; (2) merging the Registrant with and into First National Power Corporation, a Nevada corporation and a wholly-owned indirect (second tier) subsidiary of the Registrant, such that First National Energy Corporation, a Nevada corporation and a wholly-owned direct (first tier) subsidiary of the Registrant, succeeded the Registrant as a successor issuer of its registered securities, pursuant to Rule 12g-3 under the Securities Exchange Act of 1934, and continued the business of the Registrant for all purposes; (3) exchanging each issued and outstanding share of the Registrant (bearing CUSIP number 32113F 10 3) on the record date (and after giving effect to the reverse stock split described above) into one new common share of the successor issuer (bearing CUSIP number 321129 108); (4) shifting the Registrant’s charter from the State of Delaware to the State of Nevada; (5) increasing the authorized capital of the Registrant from 100 million common shares to 300 million common shares; (6) changing the Registrant’s name from “First National Power Corporation” to “First National Energy Corporation”; and (7) changing the Registrant’s stock symbol from FNPR to FNEC.

On April 20, 2009, the Registrant acquired a territorial license to certain rights in alternative wind energy technology in exchange for 98,800,000 newly issued common shares of the Registrant, which resulted in a change in control of the Registrant. The Registrant valued the technology license received in such transaction at $1,855,605 after consulting with an outside valuation expert.

In addition, the Registrant has acquired technology rights to an additional territory for the licensed technology, and intends to exploit such rights through a newly formed and wholly-owned subsidiary [see Note 1(c) of accompanying interim financial statements].

Business of Issuer

Since acquiring the technology license described above, management of the Registrant has expended significant time seeking sources of capital to implement its business plan, which is primarily designed to exploit the licensed technology throughout the United States and Canada for commercial gain. In addition, the Registrant has acquired technology rights to an additional territory for the licensed technology, and intends to exploit such rights through a newly formed and wholly-owned subsidiary [see Note 1(c) of accompanying interim financial statements]. The Registrant is also evaluating other alternatives in order to improve the Registrant's financial condition, including merger and acquisition opportunities. There is no assurance that the Registrant will be successful in raising capital or closing any such merger or acquisition transactions.

Except as described above and as more particularly described in the Registrant’s accompanying interim financial statements, there have been no other material changes in the registrant’s financial condition from the end of the preceding fiscal year to the date of the interim balance sheet provided herein, nor have there been any other material changes in the registrant’s financial condition during the period ending on the date of the interim balance sheet provided herein and commencing on the corresponding interim date of the preceding fiscal year.

Except as described above and as more particularly described in the Registrant’s accompanying interim financial statements, there have been no material changes in the registrant's results of operations with respect to the most recent fiscal year-to-date period for which an income statement is provided and the corresponding year-to-date period of the preceding fiscal year.

Critical Accounting Policies and Estimates

The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America. The amounts of assets, liabilities, revenues and expenses reported in the Company’s financial statements are affected by accounting policies, estimates and assumptions that are necessary to comply with generally accepted accounting principles. Estimates used in the financial statements are derived from prior experience, statistical analysis and professional judgments. Actual results may differ significantly from these estimates and assumptions.

The Company considers an estimate to be critical if it is material to the financial statements and it requires assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate are reasonably likely to occur from period to period.

Plan of Operation

Since acquiring the technology license described above, management of the Registrant has expended significant time seeking sources of capital to implement its business plan, which is primarily designed to exploit the licensed technology throughout the United States and Canada for commercial gain. In addition, the Registrant has acquired technology rights to an additional territory for the licensed technology, and intends to exploit such rights through Pavana Power Corporation, a Nevada corporation, a newly formed and wholly-owned subsidiary [see Note 1(c) of accompanying interim financial statements]. The Registrant is also evaluating other alternatives in order to improve the Registrant's financial condition, including merger and acquisition opportunities. There is no assurance that the Registrant will be successful in raising capital or closing any such merger or acquisition transactions.

Results of Operations

Three Months Ended March 31, 2010, compared to the Three Months Ended March 31, 2009

Assets

Licensed technology assets, net of amortization, increased from $1,725,967 at December 31, 2009, to $2,279,577, as a result of a reduction of $46,390 through amortization and an increase of $600,000 through the acquisition of an additional technology license more particularly described in Note 1(c) of the accompanying financial statements.

Revenues

The Company did not generate any operating revenues in the three months ended March 31, 2010 or in the three months ended March 31, 2009.

Costs and Expenses

Amortization of Acquired Technology

Amortization of the Company’s technology assets increased by $46,390 during the three months ended March 31, 2010 to $46,390 as compared to $Nil during the comparable period in 2009. The increase was solely due to the fact that no technology assets were held by the Company during the prior period.

Amortization for the next 5 years is estimated to be as follows:

2010	$	230,561
2011		245,561
2012		245,561
2013		245,561
2014		245,561
	$	1,212,805

General and Administrative

General and administrative expenses decreased to $3,670 during the three months ended March 31, 2010, as compared to $10,237 during the comparable period in 2009. This decrease was primarily due to a difference in the nonrecurring professional fees and filing fees incurred in the prior period in anticipation of the Company’s reorganization as more particularly described above.

Liquidity and Capital Resources

Cash and cash equivalents were $28,003 at March 31, 2010, compared to $36,730 at December 31, 2009.

The Company is a development stage company and has not generated any operating revenues as of March 31, 2010. In addition, the Company will continue to incur net losses and cash flow deficiencies from operating activities for the foreseeable future.

Based on its cash flow projections, the Company will need additional financing to carry out its planned business activities and complete its plan of operations through December 31, 2010. At the Company’s present level of activities, the Company’s cash and cash equivalents are believed, at this time, to be sufficient to fund its operations only into the fourth quarter of this current fiscal year. Accordingly, there is substantial doubt as to the Company’s ability to continue as a going concern by the end of its current fiscal year.

Much of the Company’s ability to raise additional capital or secure a strategic collaboration for the financing of its continued operations and product development will depend substantially on the successful outcome of its efforts to negotiate joint venture with wind power industry participants, the results of which will not be available until June or July of 2010. Since the Company is unable to fund its operations through December 31, 2010, it is making every effort to secure capital commitments for funds at this time. The Company is also currently seeking to raise funds through corporate collaboration and sub-licensing arrangements in connection with its ongoing and long-term operations. The Company does not know whether additional financing will be available when needed or, if available, will be on acceptable or favorable terms to it or its stockholders.

The Company’s independent registered public accounting firm expressed substantial doubt about the Company’s ability to continue as a going concern in the audit report on the Company’s audited financial statements for the fiscal year ended December 31, 2009 included in the 2009 10-K.

Net cash used in operating activities was ($8,727) for the three months ended March 31, 2010 as compared to ($19,808) during the comparable period in 2009. The increase in net cash used in operations was primarily due to a difference in the nonrecurring professional fees and filing fees incurred in the prior period in anticipation of the Company’s reorganization as more particularly described above.

The Company had no net cash used in or provided by financing activities during the three months ended March 31, 2010 and 2009.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.(Not applicable)

ITEM 4. CONTROLS AND PROCEDURES.

As of March 31, 2010, the Registrant carried out an evaluation of the effectiveness of the Registrant’s disclosure controls and procedures (as defined by Rule 13a-15(e) under the Securities Exchange Act of 1934) under the supervision and with the participation of the Registrant’s chief executive and chief financial officer. Based on and as of the date of such evaluation, the aforementioned officer has concluded that the Registrant’s disclosure controls and procedures were not effective.

The Registrant also maintains a system of internal accounting controls that is designed to provide assurance that assets are safeguarded and that transactions are executed in accordance with management’s authorization and properly recorded. This system is continually reviewed and is augmented by written policies and procedures, the careful selection and training of qualified personnel and an internal audit program to monitor its effectiveness. During the interim period ended March 31, 2010, there were no changes to this system of internal controls or in other factors that could significantly affect those controls.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Registrant is not a party to any pending or threatened legal proceedings.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The Registrant has not sold any unregistered equity securities during the period covered by this report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

ITEM 4. REMOVED AND RESERVED.

ITEM 5. OTHER INFORMATION.

(Not Applicable)

ITEM 6. EXHIBITS.

Exhibit No.		Document

	31*	Sect. 302 Certification Statement of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32*	Sect. 906 Certification Statement of the Principal Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

______________

* Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FIRST NATIONAL ENERGY CORPORATION

Dated: May 20 , 2010	By:	/s/ Doug Lindeblom
		Doug Lindeblom, Chief Executive Officer

FIRST NATIONAL ENERGY CORPORATION

(Formerly First National Power Corporation)

(A Development Stage Company)

Consolidated Interim Statements of Operations and Comprehensive Loss

For the 3 Month periods ended March 31, 2010 and March 31, 2009 and the cumulative period since Inception