UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~March~~June 3130, 2017

[ ] 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: 001-37696

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.)

44 Greystone Crescent, Georgetown, Ontario Canada L7G 1G9

(Address of principal executive offices) (Zip Code)

(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. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X] Yes [ ] 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 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] Emerging growth company [ ] ~~(Do not check if a smaller reporting company)~~

(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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

Yes [ ] No [X]

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 June 2030, 2017, there were 99,915,228 common shares issued and outstanding.

Transitional Small Business Disclosure Format Yes [ ] No [X]

First National Energy Corporation

Interim Consolidated Financial Statements

~~March~~June 3130, 2017

(Amounts expressed in US Dollars)

(unaudited)

Index

Interim Consolidated Balance Sheets as at March 31, 2017 (unaudited) and December 31, 2016 (audited)	2
Interim Consolidated Balance Sheets as at June 30, 2017 (unaudited) and December 31, 2016 (audited)	3
Interim Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2017 (unaudited) and March 31, 2016 (unaudited)	3
Interim Consolidated Statements of Operations and Comprehensive Loss for the six and three months ended June 30, 2017 (unaudited) and June 30, 2016 (unaudited)	4
Interim Consolidated Statements of Stockholders’ Deficiency for the three months ended March 31, 2017 (unaudited) and year ended December 31, 2016 (audited)	4
Interim Consolidated Statements of Stockholders’ Deficiency for the six months ended June 30, 2017 (unaudited) and year ended December 31, 2016 (audited)	5
Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2017 (unaudited) and March 31, 2016 (unaudited)	5
Interim Consolidated Statements of Cash Flows for the six months ended June 30, 2017 (unaudited) and June 30, 2016 (unaudited)	6
Condensed notes to Interim Consolidated Financial Statements	6 - 11
Notes to Interim Consolidated Financial Statements	7 - 12

Page 1

FIRST NATIONAL ENERGY CORPORATION

Consolidated Balance Sheets

As of March 31, 2017 and December 31, 2016

(Amounts Expressed US Dollars)

	2017			2016
	$			$
	(unaudited)			(audited)
ASSETS
CURRENT
Cash		1,059			1,059
Total Current Assets		1,059			1,059
LICENSES FOR TECHNOLOGY (Note 4)		200			200
Total assets		1,259			1,259
LIABILITIES
CURRENT
Accounts payable and accrued liabilities		29,945			44,456
Loan payable to director (note 7)		142,400			125,117
Loan payable (note 6)		-			540,000
Loan payable to related party (note 6)		540,000			-
Total current liabilities		712,345			709,573
Going Concern (Note 2)
Related Party Transactions (Note7)
Commitment and Contingencies (Note 10)
STOCKHOLDERS’ DEFICIENCY
Capital Stock (note 8)		99,815			99,765
Additional paid-in Capital		119,779			103,329
Accumulated Deficit		(930,723	)		(911,451	)
Accumulated Other Comprehensive Loss		(10	)		(10	)
Total Stockholders’ Deficiency Attributable to the Company’s Stockholders		(731,139	)		(708,367	)
Non-controlling interest		53			53
Total Stockholders’ Deficiency		(711,086	)		(708,314	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY		1,259			1,259

The accompanying notes form an integral part to these consolidated interim financial statements

Page 2

FIRST NATIONAL ENERGY CORPORATION

~~Consolidated~~Interim ~~Statements~~Consolidated ofBalance ~~Operations and Other Comprehensive Loss~~Sheets

~~For~~As ~~the~~of 3June ~~months~~30, ~~ended~~2017 ~~March~~and December 31, 2016

(Amounts Expressed US Dollars)

	2017			2016
	$			$
	(unaudited)			(~~unaudited~~audited)
REVENUE		-			-
ASSETS
EXPENSES
CURRENT
General and administrative		19,272			12,392
Cash		1,689			1,059
TOTAL OPERATING EXPENSES		19,272			12,392
Total Current Assets		1,689			1,059
LOSS BEFORE INCOME TAXES		(19,272	)		(12,392	)
LICENSES FOR TECHNOLOGY (Note 4)		200			200
Income taxes		-			-
Total assets		1,889			1,259
NET LOSS		(19,272	)		(12,392	)
LIABILITIES
Net loss and comprehensive loss attributable to the Company’s stockholders		(19,272	)		(12,392	)
CURRENT
Net loss and comprehensive loss attributable to non-controlling interest		-			-
Accounts payable and accrued liabilities		32,493			44,456
NET LOSS AND COMPREHENSIVE LOSS		(19,272	)		(12,392	)
Loan payable to director (note 7)		141,046			125,117
Net loss per share - basic and diluted	$	0.00		$	0.00
Loan payable (note 6)		-			540,000
Weighted average common shares outstanding		99,900,942			99,865,228
Loan payable to related party (note 6)		540,000			-
Total current liabilities		713,539			709,573
Going Concern (Note 2)
Related Party Transactions (Note7)
Commitment and Contingencies (Note 10)
STOCKHOLDERS’ DEFICIENCY
Capital Stock (note 8)		99,815			99,765
Additional paid-in Capital		123,279			103,329
Accumulated Deficit		(934,787	)		(911,451	)
Accumulated Other Comprehensive Loss		(10	)		(10	)
Total Stockholders’ Deficiency Attributable to the Company’s Stockholders		(711,703	)		(708,367	)
Non-controlling interest		53			53
Total Stockholders’ Deficiency		(711,650	)		(708,314	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY		1,889			1,259

The accompanying notes form an integral part toof these consolidated interim financial statements

Page 3

FIRST NATIONAL ENERGY CORPORATION

~~Consolidated~~Interim Consolidated Statements of ~~Changes~~Operations inand ~~Stockholders’~~Other ~~Deficiency~~Comprehensive Loss

For the ~~years~~six ~~ended December 31, 2016~~ and 3three months ended ~~March 31, 2017~~

(Amounts Expressed US Dollars)

	Number of Common Shares			Common Shares Amount			Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Stockholders’ Deficiency
	6 months ended June 30						3 months ended June 30
				$			$			$			$			$			$
	2017			2016			2017			2016
Balance as of December 31, 2014		99,865,228			99,765			103,329			(876,475	)		(10	)		58			(673,338	)
	$			$			$			$
Net loss for the year		-			-			-			(22,612	)		-			(5	)		(22,612	)
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Balance as of December 31, 2015		99,865,228			99,765			103,329			(899,087	)		(10	)		53			(695,950	)
REVENUE		-			-			-			-
Net loss for the year		-			-			-			(12,364	)		-			-			(12,364	)
EXPENSES
Balance as of December 31, 2016 (audited)		99,865,228			99,765			103,329			(911,451	)		(10	)		53			(708,314	)
General and administrative		23,336			(16,025	)		4,064			(28,417	)
Sales of 50,000 shares of common stock		50,000			50			16,450			-			-			-			16,500
Total Operating Expenses		23,336			(16,025	)		4,064			(28,417	)
Net loss for the year		-			-			-			(19,272	)		-			-			(19,272	)
INCOME (LOSS) BEFORE INCOME TAXES		(23,336	)		16,025			(4,064	)		28,417
Balance as of March 31, 2017 (unaudited)		99,915,228			99,815			119,779			(930,723	)		(10	)		53			(711,086	)
Income taxes		-			-			-			-
NET INCOME (LOSS)		(23,336	)		16,025			(4,064	)		28,417
Net Income (Loss) and comprehensive Income (loss) attributable to the Company’s stockholders		(23,336	)		16,025			(4,064	)		28,417
Net Income (Loss) and comprehensive Income (loss) attributable to non-controlling interests		-			-			-			-
NET AND COMPREHENSIVE INCOME (LOSS)		(23,336	)		16,025			(4,064	)		28,417
Net earnings (loss) per share – basic and diluted	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00
Weighted average common shares outstanding		99,908,046			99,865,228			99,915,228			99,865,228

The accompanying notes form an integral part toof these consolidated interim financial statements

Page 4

FIRST NATIONAL ENERGY CORPORATION

~~Consolidated~~Interim Consolidated Statements of ~~Cash~~Changes ~~Flows~~in Stockholders’ Deficiency

For the 3six months ended June 30, 2017 and year ended December 31, 2016

(Amounts Expressed US Dollars)

	2017			2016
													Accumulated
	$			$
	Number of			Common			Additional						Other			Non-				Total
CASH FLOWS FROM OPERATING ACTIVITIES
	Common			Shares			Paid-in			Accumulated			Comprehensive			controlling				Stockholders’
Net loss		(19,272	)		(12,392	)
	Shares			Amount			Capital			Deficit			Loss			Interests				Deficiency
Decrease in accounts payable and accrued liabilities		(14,511	)		(6,731	)
					$			$			$						$				$
Net cash used in operating activities		(33,783	)		(19,123	)
Balance as of December 31, 2014		99,865,228			99,765			103,329			(876,475	)		(10	)		58				(673,338	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net loss for the year		-			-			-			(22,612	)		-			(5	)			(22,612	)
Increase in loan from director		17,283			18,473
Balance as of December 31, 2015		99,865,228			99,765			103,329			(899,087	)		(10	)		53				(695,950	)
Issuance of shares, net of financing expenses		16,500			-
Net loss for the year		-			-			-			(12,364	)		-			-				(12,364	)
Net cash provided by financing activities		33,783			18,473
Balance as of December 31, 2016 (audited)		99,865,228			99,765			103,329			(911,451	)		(10	)		53				(708,314	)
NET DECREASE IN CASH		-			(650	)
Sales of 50,000 shares of common stock		50,000			50			24,950			-			-			-				25,000
Cash, beginning of period		1,059			1,937
Financing Costs								(5,000	)												(5,000	)
CASH, END OF PERIOD		1,059			1,287
Net loss for the period		-			-			-			(23,336	)		-			-		-		(23,336	)
Balance as of June 30, 2017 (unaudited)		99,915,228			99,815			123,279			(934,787	)		(10	)		53				(711,650	)

The accompanying notes form an integral part toof these consolidated interim financial statements

Page 5

FIRST NATIONAL ENERGY CORPORATION

Interim Consolidated Statements of Cash Flows

For the six months ended June 30,

(Amounts Expressed US Dollars)

	2017			2016
		$			$

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)		(23,336	)		16,025
Decrease in accounts payable and accrued liabilities		(11,963	)		(26,584	)

Net cash used in operating activities		(35,299	)		(10,560	)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase in loan from director		15,929			9,683
Issuance of shares		25,000			-
Less share issuance finance cost		(5,000	)
Purchase of Intangible		-			(1	)

Net cash provided by financing activities		35,929			9,682

NET INCREASE (DECREASE) IN CASH		630			(878	)

Cash, beginning of period		1,059			1,937

CASH, END OF PERIOD		1,689			1,059

The accompanying notes form an integral part to these consolidated interim financial statements

Page 6

FIRST NATIONAL ENERGY CORPORATION

Notes to Interim Consolidated Financial Statements

June 30, 2017

(Amounts expressed in US Dollars)

1. NATURE OF OPERATIONS AND PURCHASE OF TECHNOLOGY

a) Nature of operations

First National Energy Corporation (the “Company”) was incorporated in the State of Delaware on November 16, 2000, under 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 its 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 consolidated 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. The 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 to 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 Stockholders of the Company on May 4, 2009.

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.

In exchange for the Company acquiring the technology license from Boreas at the Closing pursuant to the Agreement (as amended by the Amendment), the Stockholders of Boreas received an aggregate of 98,800,000 new restricted and unregistered common shares of the Company’s common stock. Accordingly, the Boreas Stockholders now own 98.93% of the Company’s 99,865,228 outstanding common shares. No finder’s fees were paid or consulting agreements entered into by the Company in connection with the transaction.

~~Prior to~~Page 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.7

~~Page~~FIRST 6NATIONAL ENERGY CORPORATION

Notes to Interim Consolidated Financial Statements

June 30, 2017

(Amounts expressed in US Dollars)

1. NATURE OF OPERATIONS AND PURCHASE OF TECHNOLOGY (cont’d)

b) Purchase of Technology License (cont’d)

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.

On April 18, 2011, First National Energy Corporation (the “Company”) entered into a Novation Agreement (the “Novation”) with all of the stockholders of Boreas revising the structure of the May 25, 2009 transaction by which the Company acquired 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. The Novation amended the Technology License and Stock Purchase Agreement (the “Original Agreement”) to substitute the stockholders of Boreas as the licensor under the Original Agreement.

c) Further Purchase of Technology License

On March 22, 2010, Pavana Power Corporation (“Pavana”), a Nevada corporation, the Company’s 99.9% owned subsidiary, acquired an exclusive, territorial, 25-year license for the Republic of India (“India”), from Boreas, 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” (earnings before interest, taxes, depreciation and amortization) from exploitation of the acquired license.

2. GOING CONCERN

The Company’s consolidated 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 ~~December 31~~June 30, ~~2016~~2017 and 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. There can be no assurance that the Company will have adequate capital resources to fund planned operations or that any additional funds will be available to the Company when needed, or if available, will be available on favorable terms in the amounts required by the Company. These conditions raise substantial doubt about the Company’'s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management has plans to raise cash through debt offerings once the sales of the technologies begin. The facilities and equipment required for successfully completing the business model have been identified but until the resources are available, have not been acquired or engaged. In the period prior to the onset of operations, the Company will undertake to raise further cash through further capital offerings. There is no assurance that the Company will be successful in raising additional capital.

Page 78

FIRST NATIONAL ENERGY CORPORATION

Notes to Interim Consolidated Financial Statements

June 30, 2017

(Amounts expressed in US Dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Presentation and Consolidation

The unaudited interim consolidated financial statements include the accounts of First National Energy Corporation, its wholly-owned subsidiary First National Energy (Canada) Corporation and its 99.99% owned subsidiary Pavana Power Corporation. All material inter-company amounts have been eliminated.

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X related to smaller reporting companies.

The unaudited interim consolidated financial statements should be read in conjunction with the financial statements and Notes thereto together with management’s discussion and analysis of financial condition and results of operations contained in the Company’s annual report on Form 10-K for the year ended December 31, 2016. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature considered necessary to fairly state the financial position of the Company at ~~March~~June 3130, 2017, the results of its operations for the six and three months ended ~~March~~June 3130, 2017 and 2016, and its cash flows for the ~~three~~six months ended ~~March~~June 3130, 2017 and 2016. In addition, some of the Company’s statements in its quarterly report on Form 10-Q may be considered forward-looking and involve risks and uncertainties that could significantly impact expected results. The results of operations for the ~~three~~six months ended ~~March~~June 3130, 2017 are not necessarily indicative of results to be expected for the full year.

b) 2016 Omnibus Equity Compensation Plan

On February 1, 2016, the Board of Directors approved the 2016 Omnibus Equity Compensation Plan (“Stock Option Plan”) for employees and non-employees. The Stock Option Plan reserves up to five million shares of common stock for issuance.

All awards granted to employees and non-employees after February 1, 2016 are valued at fair value by using the Black-Scholes option pricing model and recognized on a straight line basis over the service periods of each award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees using the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services.

If there is a modification of the terms of an award, either by repricing or extending the expiry of the award, the award is re-measured. If the modification results in an increase in the fair value of the new award as compared to the old award immediately prior to the modification, the excess fair value is recognized as compensation expense.

As of ~~March~~June 3130, 2017, there was $nil of recognized expense related to non-vested stock-based compensation arrangements granted.

Page 9

FIRST NATIONAL ENERGY CORPORATION

Notes to Interim Consolidated Financial Statements

June 30, 2017

(Amounts expressed in US Dollars)

4. LICENSES FOR TECHNOLOGY

	2017				2016
	Cost		Net Book Value		Net Book Value
North American Technology License	$	100	$	100	$	100
Indian Technology License	$	100	$	100	$	100
Total	$	200	$	200	$	200

Page 8

5. INTANGIBLE ASSET

Effective February 5, 2016, the Company acquired VAWT/VRTB/Bolotov Rotor wind turbine technology (“Technology”) from Bolotov and affiliates (“Serge Bolotov”). The technical and intellectual property were designed, patented, developed and manufactured by Serge Bolotov.

The Company valued this technology under the guidance of ASC 350, Intangibles-Goodwill and Other which states that an intangible asset that is acquired either individually or with a group of other assets shall be initially measured based on its fair value. As there is no active market and the future cash flows and economic viability of this intellectual property are uncertain and cannot be measured reliably, no value was assigned to the technology.

The future compensation to Serge Bolotov consists of:

	-	10% of all profits generated by sale of this technology as royalties
	-	A purchase bonus of $1,000,000 to be paid out of 11% of the net profits from the intellectual property. (See also note 11)

In the event the Company or a related or assigned party does not use the assets transferred in the transaction within a period of 3 years from the date the memorandum of understanding was accepted as a final agreement on February 5th, 2016, Serge Bolotov will have the right, but not the obligation, to purchase all unused assets, following ten days written notice to the Company or a related or assigned party for the amount of US $5,000.

6. LOAN PAYABLE TO RELATED PARTY

On March 22, 2010, the Company acquired an exclusive territorial 25 year Supplemental Wind Energy Generator (“SWEG”) Technology license for the Republic of India (“India”), from Boreas. The stockholders of Boreas hold a controlling interest in the Company through their controlling interest in First National Energy Corporation. The technology of Boreas 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 to Boreas was a deferred cash payment of $600,000, and a future royalty equal to 5% of the subsidiary’s “EBITDA” (earnings before interest, taxes, depreciation and amortization) from exploitation of the acquired license.

On November 8, 2010, the subsidiary paid Boreas $60,000 as a payment due under the India technology license agreement, leaving a balance of cash consideration due of $540,000. The remaining debt is non-interest bearing and is due on demand.

Page 10

FIRST NATIONAL ENERGY CORPORATION

Notes to Interim Consolidated Financial Statements

June 30, 2017

(Amounts expressed in US Dollars)

6. LOAN PAYABLE TO RELATED PARTY (cont’d)

On October 28, 2016, Boreas assigned its loan receivable due from the Company to one of the Company’s shareholders. The amount previously owed by the Company to Boreas is now owed to a shareholder of the Company. The loan to shareholder is non-interest bearing, is due on demand and has no security or conversion features.

~~Page~~7. 9LOAN PAYABLE TO DIRECTOR AND RELATED PARTY TRANSACTIONS

7 LOAN PAYABLE TO DIRECTOR AND RELATED PARTY TRANSACTIONS

Transactions with related parties are incurred in the normal course of business and are measured at the exchange amount which is the amount of consideration established by and agreed to by the related parties.

A director of the Company has advanced monies to the Company to pay certain expenses. The advances have no interest rate and is due on demand. The amount owing to the director was $~~142~~141,~~400~~046 ($125,117 in 2016).

8. CAPITAL STOCK

a) Authorized

300,000,000 Common shares, $0.001 per value

b) Issued

99,915,228 Common shares (2016: 99,865,228 Common shares) valued at $99,815 (2016: $99,765).

In 2017, the Company offered up to 500,000 shares of common stock at a price of $0.50 per share, $.0001 par value (the “Offering”). On January 27, 2017, in connection with the Offering, the Company issued and sold on a private placement basis, 50,000 shares at a price of $0.50 per share for total proceeds of $25,000. Financing expenses in the amount of $5,000 pursuant to the private placement were recorded as a reduction in additional paid-in capital.

9. SEGMENTED INFORMATION

The Company, after reviewing its operating systems, has determined that it has no reportable segment and geographic segment. The Company’s operations are all related to the provision of wind-driven solutions for power generation. All assets of the business are located in the United States of America.

10. COMMITMENT AND CONTINGENCIES

	a)	Pursuant to Note 1 (c), under the Technology License purchased by Pavana, the Company has a commitment for royalties at 5% of earnings before interest, taxes, depreciation and amortization (“EBITDA”) derived by Pavana using this technology.
	b)	Pursuant to the purchase of intellectual property from Serge Bolotov (the “vendor”), the Company has the following commitments related to the purchase:

Pursuant to Note 1 (c), under the Technology License purchased by Pavana, the Company has a commitment for royalties at 5% of earnings before interest, taxes, depreciation and amortization (“EBITDA”) derived by Pavana using this technology.

i.b) AsPursuant ~~consideration~~to ~~for~~ the ~~transaction,~~purchase ~~the vendor shall be paid 10%~~ of ~~the profits realized by the Company or a related or assigned party and a signing bonus of $1,000,000 to be derived from 11% of the initial profits from the~~ intellectual property. ~~ii.~~from ~~Following~~Serge ~~completion~~Bolotov ~~of sufficient funding of~~ (the ~~Company or related or assigned party, the following shall occur: the~~ “vendor ~~will be paid the sum of $8~~”),~~000~~ ~~CAD per month in cash or shares, as long as~~ the ~~vendor is needed as a consultant with the~~ Company orhas a related or assigned party. The Company or related or assigned party will provide research and development facility with support staff. iii. The Company or a related or assigned party will act to appoint Serge Bolotov as a member of the ~~Board~~following ofcommitments ~~Directors. Upon successful appointment to the Board, the Company or a~~ related or assigned party will issue the vendor 100,000 common shares as compensation for his Board of Director appointment and Director services. As at December 31, 2016, the vendor has not yet been appointed to the ~~Board.~~purchase:

Page 10

	i.	As consideration for the transaction, the vendor shall be paid 10% of the profits realized by the Company or a related or assigned party and a signing bonus of $1,000,000 to be derived from 11% of the initial profits from the intellectual property.

	ii.	Following completion of sufficient funding of the Company or related or assigned party, the following shall occur: the vendor will be paid the sum of $8,000 CAD per month in cash or shares, as long as the vendor is needed as a consultant with the Company or a related or assigned party. The Company or related or assigned party will provide research and development facility with support staff.

Page 11

FIRST NATIONAL ENERGY CORPORATION

Notes to Interim Consolidated Financial Statements

June 30, 2017

(Amounts expressed in US Dollars)

10. COMMITMENT AND CONTINGENCIES (cont’d)

	iii.	The Company or a related or assigned party will act to appoint Serge Bolotov as a member of the Board of Directors. Upon successful appointment to the Board, the Company or a related or assigned party will issue the vendor 100,000 common shares as compensation for his Board of Director appointment and Director services. As at December 31, 2016, the vendor has not yet been appointed to the Board.

	iv.	The Company or a related or assigned party will act to appoint Serge Bolotov as a member of the Board of Directors. Upon successful appointment to the Board, the Company or a related or assigned party will issue the vendor 100,000 common shares as compensation for his Board of Director appointment and for Director services. As of June 30, 2017, the vendor has not yet been appointed to the Board.

	c)	Effective February 1, 2016, the Company executed an agreement with legal counsel to pay a monthly fee of $2,500 commencing February 1, 2016 with respect to legal matters of securities regulation, private placements, corporate governance, and related matters in connection with the Company. The two parties reserve the right to terminate or withdraw from the agreement at any time.

	d)	Pursuant to Note 1 (b), under the Technology License and Stock Purchase Agreement signed with Boreas, the Company agreed to pay certain future royalties to Boreas from net future revenues realized by the Company from the technology license.

11. CAPITAL MANAGEMENT

The Company’s capital management objective is to secure the ability to continue as a going concern and to optimize the cost of capital in order to enhance value to shareholders. As part of this objective, the Company seeks to maintain access to loan and capital markets at all times. The Board of Directors reviews the capital structure of the Group on a regular basis.

Capital structure and debt capacity are taken into account when deciding new investments and the Company may consider share buybacks and share issuances as other strategies. Debt capital is managed considering the requirement to secure liquidity and the capability to refinance maturing debt.

On ~~March~~ 31June 30, 2017, the Company had no interest-bearing debt.

12. FINANCIAL INSTRUMENTS

The Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them.

Foreign exchange risk:

The Company’s subsidiary conducts its activities in Canadian dollars. The Company is therefore subject to gains or losses due to fluctuations in Canadian currency relative to the US dollar. The Company has no exposure to this given its limited activity and assets through the year.

Liquidity risk:

The Company monitors its liquidity position regularly to assess whether it has the funds necessary to fulfill planned commitments on its alternative energy technology or viable options are available to fund such commitments from new equity issuance or alternative ~~sources~~ sources such as debt financing. However, without significant internally generated cash flow, there are inherent liquidity risks, including the possibility that additional financing may not be available to the Company, or that actual development ~~expenditures~~ expenditures may exceed those planned. The current uncertainty in global markets could have an impact on the Company’s future ability to access capital on terms that are acceptable to the Company. The company has so far been able to raise the required financing to meet its obligations on time. The Company continues to pursue potential investees and have already secured additional equity financing from investors subsequent to the year end. ~~See note 15.~~

Page 11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless otherwise indicated, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” are to the Company, unless the context requires otherwise. The following discussion and analysis by our management of our financial condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and the accompanying related notes included in this quarterly report and our audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission.

Cautionary Statement Regarding Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and we intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Any such forward-looking statements would be contained principally in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Additional information concerning these and other risks and uncertainties is contained in our filings with the Securities and Exchange Commission, including the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016.

Unless otherwise indicated or the context otherwise requires, all references in this Form 10-Q to “we,” “us,” “our,” “our Company,” “First National Energy Corporation” or refer to First National Energy Corporation and its subsidiaries.

Description of Business

Business Development

We were incorporated as Capstone International Corporation on November 16, 2000, in the State of Delaware, and our shares were registered with the Securities and Exchange Commission on Form SB-2 as SEC File No. 333-62588, filed on June 8, 2001. Our 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 we affected a reverse stock split, adopted a holding company structure, and relocated our corporate charter from Delaware to Nevada as part of the reorganization described in the next succeeding paragraph.

Page 12

~~As described~~Item 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 our board of directors and a majority of its stockholders, on February 12, 2009, we effected a reorganization 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 at that time from 76,522,760 to 765,228, with no effect on the number of authorized common shares; (2). ~~merging~~Management’s ~~our~~Discussion ~~company with~~ and ~~into~~Analysis ~~First National Power Corporation, a Nevada corporation and a wholly-owned indirect (second tier) subsidiary~~ of ~~our~~Financial ~~company~~Condition ~~, such that First National Energy Corporation, a Nevada corporation~~ and aResults ~~wholly-owned direct (first tier) subsidiary~~ of our company, succeeded as a successor issuer of its registered securities and continued our business for all purposes; (3) exchanging each issued and outstanding share on the record date (and after giving effect to the reverse stock split described above) into one new common share of the successor issuer ; (4) re-domesticating the our charter from the State of Delaware to the State of Nevada; (5) increasing the authorized capital from 100 million common shares to 300 million common shares; (6) changing our name from “First National Power Corporation” to “First National Energy Corporation”; and (7) changing our stock symbol from FNPR to FNECOperations.

~~On April~~Unless ~~20,~~otherwise ~~2009~~indicated, references in this Quarterly Report on Form 10-Q to “we,” ~~acquired~~“us,” aand ~~territorial~~“our” ~~license~~are to ~~certain~~the ~~rights~~Company, inunless ~~alternative~~the context ~~wind~~requires ~~energy~~otherwise. ~~technology~~The infollowing ~~exchange~~discussion ~~for~~and ~~98,800,000 newly~~analysis ~~issued~~by ~~common~~our ~~shares,~~management ~~which~~of ~~resulted~~our infinancial acondition ~~change~~and results of operations should be read in ~~control.~~conjunction Wewith ~~valued~~our unaudited condensed interim financial statements and the ~~technology~~accompanying ~~license~~related ~~received~~notes included in ~~such~~this ~~transaction~~quarterly report and our audited financial statements and related notes and Management’s Discussion and Analysis atof ~~$1,855,605~~Financial ~~after~~Condition ~~consulting~~and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with anthe ~~outside~~Securities ~~valuation~~and ~~expert~~Exchange Commission.

~~On April~~Cautionary ~~18,~~Statement ~~2011,~~Regarding ~~we entered into a Novation Agreement (the “Novation”) with all of the stockholders of Boreas Research~~Forward-Looking Corporation (“Boreas”), a Florida corporation, revising the structure of the April 20, 2009 transaction by which we acquired a territorial license to certain rights in alternative energy technology of Boreas, in exchange for 98,800,000 of our common shares as disclosed above. The Novation amended the 2009 agreement to substitute the stockholders of Boreas as the licensor under the original 2009 agreement.Statements

InThis report may contain forward-looking statements ~~addition~~within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and we ~~acquired~~intend ~~technology~~that ~~rights~~such forward-looking statements be subject to anthe ~~additional~~safe ~~territory~~harbors ~~for~~created ~~the~~thereby. ~~licensed~~These ~~technology~~forward-looking ~~through~~statements aare ~~wholly~~based on our management’s beliefs and assumptions and on information currently available to our management. Any such forward-~~owned~~looking ~~subsidiary~~statements would be contained principally in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities ~~Pavana~~and ~~Power~~the ~~Corporation~~effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

~~Business~~Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of ~~Issuer~~these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

~~Since acquiring~~Additional ~~the~~information ~~technology~~concerning ~~license~~these ~~described above, our management has expended significant time seeking sources of capital to implement~~and ~~our~~other ~~business~~risks ~~plan,~~and ~~which~~uncertainties is ~~primarily~~contained ~~designed~~in toour ~~exploit~~filings ~~the~~with ~~licensed technology throughout~~ the ~~United~~Securities ~~States~~ and ~~Canada~~Exchange ~~for commercial gain. In addition~~Commission, weincluding ~~have acquired technology rights to an additional territory for~~ the ~~licensed~~section ~~technology. Management~~entitled is“Risk ~~also~~Factors” ~~evaluating other alternatives~~ in ~~order to improve~~ our ~~financial~~Annual ~~condition,~~Report ~~including~~on ~~merger~~Form ~~and~~10-K ~~acquisition~~for ~~opportunities. There~~the isyear noended ~~assurance~~December ~~that~~31, ~~we will be successful in raising capital or closing any such merger or acquisition transactions~~2016.

~~Except as~~Unless ~~described~~otherwise ~~above~~indicated ~~and~~or asthe ~~more~~context ~~particularly described in our accompanying interim financial statements~~otherwise requires, ~~there~~all ~~have~~references ~~been no other material changes~~ in ~~our~~this ~~financial~~Form ~~condition~~10-Q ~~from the end of the preceding fiscal year~~ to ~~the~~“we,” ~~date~~“us,” ~~of the interim balance sheet provided herein~~“our,” 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 “our ~~accompanying interim financial statements~~Company, ~~there~~” ~~have~~“First ~~been~~National noEnergy ~~material~~Corporation” ~~changes~~or inrefer ~~our results of operations with respect~~ to ~~the~~First ~~most~~National ~~recent~~Energy ~~fiscal~~Corporation ~~year-to-date period for which an income statement is provided~~ and ~~the~~its ~~corresponding year-to-date period of the preceding fiscal year~~subsidiaries.

~~Critical Accounting~~Description ~~Policies~~of ~~and Estimates~~Business

~~The consolidated~~Business financial statements of our 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 our 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.Development

~~Management considers~~We anwere ~~estimate~~incorporated toas beCapstone ~~critical~~International Corporation ifon itNovember is16, ~~material~~2000, toin the ~~financial~~State ~~statements~~of Delaware, and itour ~~requires~~shares ~~assumptions~~were registered with the Securities and Exchange Commission on Form SB-2 as SEC File No. 333-62588, filed on June 8, 2001. Our name was changed to be“First ~~made~~National ~~that~~Power Corporation” ~~were~~on ~~uncertain~~January 28, 2004, and was changed again to “First National Energy Corporation” on February 12, 2009, at ~~the~~which time we ~~the~~affected ~~estimate~~a ~~was~~reverse ~~made~~stock ~~and~~split, ~~changes~~adopted ina ~~the~~holding ~~estimate~~company ~~are~~structure, ~~reasonably~~and ~~likely~~relocated toour ~~occur~~corporate charter from ~~period~~Delaware to ~~period~~Nevada as part of the reorganization described in the next succeeding paragraph.

Page 13

~~Recently~~As described in the definitive information ~~Issued~~statement ~~Accounting~~on ~~Pronouncements~~Form DEF 14-C filed with the Securities and Exchange Commission on December 22, 2008, and pursuant to the approval of our board of directors and a majority of its stockholders, on February 12, 2009, we effected a reorganization 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 at that time from 76,522,760 to 765,228, with no effect on the number of authorized common shares; (2) merging our company with and into First National Power Corporation, a Nevada corporation and a wholly-owned indirect (second tier) subsidiary of our company , such that First National Energy Corporation, a Nevada corporation and a wholly-owned direct (first tier) subsidiary of our company, succeeded as a successor issuer of its registered securities and continued our business for all purposes; (3) exchanging each issued and outstanding share on the record date (and after giving effect to the reverse stock split described above) into one new common share of the successor issuer ; (4) re-domesticating the our charter from the State of Delaware to the State of Nevada; (5) increasing the authorized capital from 100 million common shares to 300 million common shares; (6) changing our name from “First National Power Corporation” to “First National Energy Corporation”; and (7) changing our stock symbol from FNPR to FNEC.

~~See Note~~On 1April 20, ~~Recently~~2009, ~~Issued~~we ~~Accounting~~acquired ~~Pronouncements,~~a ofterritorial license ~~the~~to ~~Notes~~certain torights ~~the~~in ~~accompanying~~alternative ~~interim~~wind ~~financial~~energy ~~statements~~technology in exchange for 98,800,000 ~~included~~newly issued common shares, which resulted in ~~Item~~a 1change ofin ~~this~~control. ~~report~~We valued the technology license received in such transaction at $1,855,605 ~~for~~after ~~recently~~consulting ~~issued~~with ~~accounting~~an ~~pronouncements~~outside valuation expert.

~~Plan~~On April 18, 2011, we entered into a Novation Agreement (the “Novation”) with all of ~~Operation~~the stockholders of Boreas Research Corporation (“Boreas”), a Florida corporation, revising the structure of the April 20, 2009 transaction by which we acquired a territorial license to certain rights in alternative energy technology of Boreas, in exchange for 98,800,000 of our common shares as disclosed above. The Novation amended the 2009 agreement to substitute the stockholders of Boreas as the licensor under the original 2009 agreement.

Since acquiring the technology license described above, our management 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, we ~~have~~ acquired technology rights to an additional territory for the licensed technology through ~~Pavana~~ ~~Power Corporation,~~ a ~~Nevada corporation, a~~ wholly-owned subsidiary ~~that was organized on April 21~~, ~~2011.~~Pavana ~~There~~Power ~~is no assurance that the Registrant will be successful in raising capital or closing any such merger or acquisition transactions~~Corporation.

~~Results~~ Business of ~~Operations~~Issuer

~~Three~~Since acquiring the technology license described ~~Months~~above, ~~Ended~~our ~~March~~management 31has expended significant time seeking sources of capital to implement our business plan, ~~2017~~which is primarily designed to exploit the licensed technology throughout the United States and Canada for commercial gain. In addition, ~~compared~~we have acquired technology rights to an additional territory for the ~~Three~~licensed ~~Months~~technology. ~~Ended~~Management ~~March~~is 31also evaluating other alternatives in order to improve our financial condition, ~~2016~~including merger and acquisition opportunities. There is no assurance that we will be successful in raising capital or closing any such merger or acquisition transactions.

~~Assets~~Except as described above and as more particularly described in our accompanying interim financial statements, there have been no other material changes in our 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 our accompanying interim financial statements, there have been no material changes in our 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.

~~Licensed technology~~Critical ~~assets,~~Accounting ~~net~~Policies ofand ~~amortization, were unchanged at $200~~Estimates

~~Revenues~~The consolidated financial statements of our 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 our 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.

WeManagement considers an estimate to be critical ~~did~~if ~~not~~it ~~generate~~is ~~any~~material ~~operating~~to ~~revenues~~the financial statements and it requires assumptions to be made that were uncertain at the time the estimate was made and changes in the ~~three~~estimate ~~months~~are ~~ended~~reasonably ~~March~~likely ~~31,~~to ~~2017~~occur from period to period.

~~Costs and~~Page ~~Expenses~~14

~~Amortization of~~Recently ~~Acquired~~Issued ~~Technology~~Accounting Pronouncements.

~~There was~~See noNote ~~amortization~~1, ofRecently ~~our~~Issued ~~technology~~Accounting ~~assets~~Pronouncements, of ~~during~~ the ~~three~~Notes ~~months~~to ~~ended~~the ~~March~~accompanying ~~31,~~interim ~~2017~~financial statements, asincluded ~~compared~~in toItem ~~$-0-~~1 ~~during~~of ~~the~~this ~~comparable period~~report, infor ~~2016~~recently issued accounting pronouncements.

~~General and~~Plan ~~Administrative~~of Operation

~~Operating~~Since ~~expenses~~acquiring ~~increased~~the technology license described above, our management has expended significant time seeking sources of capital to ~~$19~~implement its business plan,~~272~~ ~~during~~which is primarily designed to exploit the ~~three~~licensed ~~months~~technology ~~ended~~throughout ~~March~~the ~~31,~~United ~~2017~~States and Canada for commercial gain. In addition, aswe ~~compared~~have acquired technology rights to ~~$12~~an additional territory for the licensed technology through Pavana Power Corporation,~~392~~ ~~during~~a Nevada corporation, a wholly-owned subsidiary that was organized on April 21, 2011. There is no assurance that the ~~comparable~~Registrant ~~period~~will be successful in raising ~~2016~~capital or closing any such merger or acquisition transactions.

~~Liquidity and~~Results ~~Capital~~of ~~Resources~~Operations

~~Cash~~Six ~~was~~Months ~~$1,059~~Ended atJune ~~March 31~~30, 2017, compared to ~~$1,059~~the atSix ~~December~~Months 31Ended June 30, 2016.

~~Total operating expenses were $19,272 during the three months ended March 31, 2017 compared to $12,392 at March 31, 2016.~~Assets

WeLicensed ~~generated~~technology ~~$17~~assets,~~283~~ ~~from~~net ~~financing~~of ~~activities during the three months ended March 31~~amortization, ~~2017 compared to $18,473 during the comparable period in 2016 due to additional funding~~ bywere aunchanged ~~shareholder.~~at ~~In the three months ended March 31, 2017, management also closed a private placement for~~ $~~16,500 as additional funding~~200

Our Company is a development stage company and have not generated any operating revenues as of March 31, 2017. In addition, we will continue to incur net losses and cash flow deficiencies from operating activities for the foreseeable future.Revenues

~~Based~~We ondid ~~its~~not ~~cash~~generate ~~flow~~any ~~projections,~~operating ~~we will~~revenues ~~need~~in ~~additional~~the ~~financing~~six tomonths ~~carry~~ended ~~out~~June ~~its planned business activities and complete its plan of operations through December 31~~30, 2017. ~~At our Company’s present level of activities, our Company’s cash is considered insufficient and this draws a substantial doubt as to our Company’s ability to continue as a going concern.~~

~~Page~~Costs 14and Expenses

~~Much of~~Amortization ~~our ability to raise additional capital or secure a strategic collaboration for the financing~~ of ~~our~~Acquired continued operations and product development will depend substantially on the successful outcome of our efforts to negotiate joint venture with wind power industry participants, the results of which will not be available until sometime later in the current fiscal year. We are also currently seeking to raise funds through corporate collaboration and sub-licensing arrangements in connection with its ongoing and long-term operations. Management 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.Technology

~~Our Company’s~~There ~~independent~~was ~~registered~~no ~~public~~amortization ~~accounting~~of ~~firm expressed substantial doubt about~~ our ~~Company’s ability to~~technology ~~continue~~assets asduring ~~a going concern in~~ the ~~audit~~six ~~report~~months onended ~~our~~June ~~Company’s~~30, ~~audited financial statements for the fiscal year ended December 31~~2017, ~~2016~~as ~~included~~compared into ~~the 2016 Form 10~~$-K0- ~~and~~during in the ~~footnotes~~comparable toperiod ~~these~~in ~~unaudited interim financial statements for the quarter ended March 31, 2017~~2016.

~~Off-Balance Sheet~~General ~~Arrangements~~and Administrative

~~We do~~Operating ~~not~~expenses ~~have~~increased ~~any off-balance sheet arrangements that have or are reasonably likely~~ to ~~have~~$23,336 aduring the ~~current~~six ormonths ~~future~~ended ~~effect~~June ~~on our financial condition~~30, ~~changes in financial condition~~2017, ~~revenues~~as orcompared ~~expenses,~~to ~~results of operations~~$16,025 ~~liquidity,~~during ~~capital~~the ~~expenditures~~comparable orperiod ~~capital resources~~in ~~that are material to investors~~2016.

~~Item 3.~~Liquidity ~~Quantitative~~ and ~~Qualitative~~Capital ~~Disclosures About Market Risk.~~Resources

~~Not required~~Cash ~~under~~was ~~Regulation~~$1,689 ~~S-K~~at ~~for~~June ~~“smaller~~30, ~~reporting~~2017, ~~companies~~compared to $1,059 at December 31, 2016.”

~~Item~~Total operating expenses were $23,336 during 4.the ~~Controls~~six ~~and~~months ~~Procedures~~ended June 30, 2017 compared to $16,025 at June 30, 2016.

~~Disclosure~~We generated $35,929 from financing activities ~~Controls~~during ~~and~~the ~~Procedures~~six months ended June 30, 2017 compared to $9,682 during the comparable period in 2016 due to additional funding by a shareholder. In the six months ended June 30, 2017, management also closed a private placement for $20,000 (net of financing) as additional funding

~~As of~~Our ~~March~~Company ~~31,~~is ~~2017,~~a ~~the~~development ~~Registrant~~stage ~~carried out an evaluation of the effectiveness of the Registrant’s disclosure controls~~company and ~~procedures~~have ~~(as~~not ~~defined~~generated byany ~~Rule~~operating ~~13a-15(e)~~revenues ~~under~~as ~~the Securities Exchange Act~~ of ~~1934)~~June ~~under~~30, ~~the~~2017. ~~supervision~~In ~~and~~addition, ~~with~~we ~~the~~will ~~participation of~~continue ~~the~~to ~~Registrant’s~~incur ~~chief~~net ~~executive~~losses and ~~chief~~cash ~~financial~~flow deficiencies ~~officer.~~from ~~Based~~operating onactivities ~~and~~for ~~as of~~ the ~~date~~foreseeable ~~of such evaluation, the aforementioned officer has concluded that the Registrant’s disclosure controls and procedures were not effective~~future.

~~The Registrant~~Page 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.15

~~Changes~~Based on its cash flow projections, we will Inneed ~~Internal~~additional ~~Control~~financing ~~Over~~to ~~Financial~~carry ~~Reporting~~out its planned business activities and complete its plan of operations through December 31, 2017. At our Company’s present level of activities, our Company’s cash is considered insufficient and this draws a substantial doubt as to our Company’s ability to continue as a going concern.

~~During~~Much of our ability to raise additional capital or secure a strategic collaboration for the ~~interim~~financing ~~period~~of ~~ended~~our ~~March~~continued ~~31,~~operations ~~2017,~~and ~~there~~product ~~were~~development nowill ~~changes~~depend substantially on the successful outcome of our efforts to ~~this~~negotiate ~~system~~joint venture with wind power industry participants, the results of ~~internal~~which will ~~controls~~not orbe available until sometime later in ~~other~~the ~~factors~~current ~~that~~fiscal ~~could~~year. We are also currently seeking to raise funds through corporate ~~significantly~~collaboration ~~affect~~and ~~those~~sub-licensing ~~controls~~arrangements in connection with its ongoing and long-term operations. Management 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.

~~Page~~Our 15Company’s independent registered public accounting firm expressed substantial doubt about our Company’s ability to continue as a going concern in the audit report on our Company’s audited financial statements for the fiscal year ended December 31, 2016 included in the 2016 Form 10-K and in the footnotes to these unaudited interim financial statements for the quarter ended June 30, 2017.

~~PART II—OTHER~~Off-Balance ~~INFORMATION~~Sheet Arrangements

~~Item~~We do not have any off-balance sheet arrangements 1.that ~~Legal~~have ~~Proceedings~~or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

~~The Registrant~~Item is3. ~~not~~Quantitative aand ~~party~~Qualitative toDisclosures ~~any~~About ~~pending~~Market ~~or threatened legal proceedings~~Risk.

~~Item 1A.~~Not ~~Risk~~required ~~Factors~~under Regulation S-K for “smaller reporting companies.”

~~Not required~~Item ~~under~~4. ~~Regulation~~Controls ~~S-K~~and ~~for “smaller reporting companies~~Procedures.”

~~Item 2.~~Disclosure ~~Unregistered~~Controls ~~Sales of Equity Securities~~ and ~~Use of Proceeds.~~Procedures

InAs of June 30, 2017, the ~~three~~Registrant ~~months~~carried out ~~ended~~an ~~March~~evaluation ~~31,~~of ~~2017,~~the ~~management~~effectiveness of the Registrant’s disclosure controls and procedures (as defined by Rule 13a-15(e) ~~also~~under ~~closed~~the ~~for~~Securities aExchange ~~private~~Act ~~placement~~of ~~for~~1934) ~~$16,500~~under ~~for~~the ~~50,000~~supervision ~~shares~~and with the participation of ~~common~~the ~~stock~~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.

~~Other~~The Registrant also maintains a system of internal ~~than~~accounting ~~the~~controls ~~above~~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 ~~Registrant~~careful ~~has~~selection ~~not~~and ~~sold~~training ~~any~~of ~~unregistered~~qualified ~~equity~~personnel ~~securities~~and ~~during~~an ~~the~~internal ~~period~~audit ~~covered~~program byto ~~this~~monitor ~~report~~its effectiveness.

~~Item 3.~~Changes ~~Defaults~~In ~~Upon~~Internal ~~Senior~~Control ~~Securities.~~Over ~~Not Applicable.~~Financial Reporting

~~There~~During the interim period ended June 30, 2017, there were no ~~defaults~~changes ~~upon~~to ~~senior~~this ~~securities~~system ~~during~~of ~~the~~internal ~~period~~controls ~~ended~~or ~~March~~in ~~31,~~other ~~2017~~factors that could significantly affect those controls.

~~Item 4.~~Page ~~Mine Safety Disclosures~~16

~~Not applicable.~~PART II—OTHER INFORMATION

Item 5 1. ~~Other~~Legal ~~Information.~~Proceedings

~~None~~The Registrant is not a party to any pending or threatened legal proceedings.

Item 6. ~~Exhibits~~1A. Risk Factors

Exhibit No.		Document
2.1 (7)		Memorandum of Understanding between First National Energy Corporation and Serge Bolotov, dated February 3, 2016, accepted as binding February 5, 2016.
3.1(1)		Articles of Incorporation
3.2 (4)		Articles of Incorporation (Nevada)
3.2(1)		Bylaws
4.1(2)		2005 Stock Incentive Plan For Employees And Consultants (2)
4.2(8)		2016 Omnibus Equity Compensation Plan
10.1(3)		Letter of Intent with Boreas Research Corporation, dated April 17, 2009
10.2(4)		First Amendment Of Technology License And Stock Purchase Agreement with Boreas Research Corporation, dated May 14, 2009
10.3(5)		Novation Agreement with Boreas Research Corporation, dated April 18, 2011.
14.1 (6)		Financial Code of Ethics

Not required under Regulation S-K for “smaller reporting companies.”

~~Page~~Item 162. Unregistered Sales of Equity Securities and Use of Proceeds.

31.1*		Sect. 302 Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Sect. 302 Certification Statement of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Sect.
32.1*		Sect. 906 Certification Statement of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
32.2*		Sect. 906 Certification Statement of the Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

In the six months ended June 30, 2017, management also closed for a private placement for $20,000 (net of financing expenses) for 50,000 shares of common stock.

~~101~~Other than the above, the Registrant has not ~~INS~~sold ~~XBRL~~any ~~Instance~~unregistered ~~Document~~equity securities during the period covered by this report.

~~101 SCH~~Item ~~XBRL~~3. ~~Taxonomy~~Defaults ~~Extension~~Upon ~~Schema~~Senior ~~Document~~Securities. Not Applicable.

~~101~~There were no defaults upon senior securities ~~CAL~~during ~~XBRL~~the ~~Taxonomy~~period ~~Calculation~~ended ~~Linkbase~~June ~~Document~~30, 2017.

~~101 DEF~~Item ~~XBRL~~4. ~~Taxonomy~~Mine ~~Extension~~Safety ~~Definition Linkbase Document~~Disclosures

~~101 LAB~~Not ~~XBRL Taxonomy Labels Linkbase Document~~applicable.

~~101 PRE~~Item ~~XBRL~~5. ~~Taxonomy~~Other ~~Presentation Linkbase Document~~Information.

	(1)	Incorporated by reference to the Company’s Form SB-2 filed on June 8, 2001.
	(2)	Incorporated by reference to the Company’s Form S-8, filed April 11, 2005.
	(3)	Incorporated by reference to the Company’s Form 8-K, filed April 21, 2009.
	(4)	Incorporated by reference to the Company’s Form 8-K, filed May 26, 2009.
	(5)	Incorporated by reference to the Company’s Form 8-K, filed April 20, 2011.
	(6)	Incorporated by reference to Exhibit 19 in the Company’s Form 10-K, filed March 16, 2012.
	(7)	Incorporated by reference to the Company’s Form 8-K, filed February 16, 2016.
	(8)	Incorporated by reference to the Company’s Form S-8, filed February 23, 2016.

None.

* FiledItem ~~herewith~~6. Exhibits.

Page 17

Exhibit No.		Document

2.1 (7)		Memorandum of Understanding between First National Energy Corporation and Serge Bolotov, dated February 3, 2016, accepted as binding February 5, 2016.

3.1(1)		Articles of Incorporation

3.2 (4)		Articles of Incorporation (Nevada)

3.2(1)		Bylaws

4.1(2)		2005 Stock Incentive Plan For Employees And Consultants (2)

4.2(8)		2016 Omnibus Equity Compensation Plan

10.1(3)		Letter of Intent with Boreas Research Corporation, dated April 17, 2009

10.2(4)		First Amendment Of Technology License And Stock Purchase Agreement with Boreas Research Corporation, dated May 14, 2009

10.3(5)		Novation Agreement with Boreas Research Corporation, dated April 18, 2011.

14.1 (6)		Financial Code of Ethics

~~SIGNATURES~~Page 17

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.

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

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

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

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

	FIRST NATIONAL ENERGY CORPORATION
101 INS		XBRL Instance Document
Dated: June 20, 2017	/s/ Gregory Sheller
101 SCH		XBRL Taxonomy Extension Schema Document
	Gregory Sheller, Chief Executive Officer
101 CAL		XBRL Taxonomy Calculation Linkbase Document
101 DEF		XBRL Taxonomy Extension Definition Linkbase Document
101 LAB		XBRL Taxonomy Labels Linkbase Document
101 PRE		XBRL Taxonomy Presentation Linkbase Document

Page 18

	(1)	Incorporated by reference to the Company’s Form SB-2 filed on June 8, 2001.

	(2)	Incorporated by reference to the Company’s Form S-8, filed April 11, 2005.

	(3)	Incorporated by reference to the Company’s Form 8-K, filed April 21, 2009.

	(4)	Incorporated by reference to the Company’s Form 8-K, filed May 26, 2009.

	(5)	Incorporated by reference to the Company’s Form 8-K, filed April 20, 2011.

	(6)	Incorporated by reference to Exhibit 19 in the Company’s Form 10-K, filed March 16, 2012.

	(7)	Incorporated by reference to the Company’s Form 8-K, filed February 16, 2016.

	(8)	Incorporated by reference to the Company’s Form S-8, filed February 23, 2016.

* Filed herewith

Page 18

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: October 26, 2017	/s/ Gregory Sheller
	Gregory Sheller, Chief Executive Officer

Page 19

Filing Compare · First National Energy Corp.