SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-KSB

Annual Report Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934

Date of Report: December 31, 2006

FIRST NATIONAL POWERCORPORATION

(Exact name ofregistrant as specified in its charter)

**
Delaware
333-62588
66-0349372(State of other    jurisdiction of incorporation or organization)
(Commission File Number)
(IRS Employer Identification No.)
 

#219 - 227 BellevueWay NE

Bellevue, WA 98004

(Address of principalexecutive offices)

Registrant's telephone number: (604) 702-5604

(Mark One)

[X] Annual report pursuant to Section 13 or 15(d) of the securities exchangeact of 1934 for the fiscal year ended December 31, 2006.

[ ] Transition report under Section 13 or 15(d) of the securities exchangeact of 1934

Securities registered under Section 12(b) of the Exchange Act:

 

Securities registered under Section 12(g) of the Exchange Act:

Common stock

Check whether the issuer (1) filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act during the past 12 months (or for suchshorter 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

Check if there is no disclosure of delinquent filers in response to Item 405or Regulation S-B contained in this form, and no disclosure will be contained,to the best of registrant's knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-KSB or anyamendment to this Form 10-KSB [X]

Indicate by check mark whether the registrant is a shell company (as definedin Rule 12b-2 of the Exchange Act) Yes x  No   

State issuer's revenues for its most recent fiscal year: As of December 31,2006, the Company has not generated any revenues.

State the aggregate market value of the voting and non-voting common equityheld by non-affiliates computed by reference to the average bid and asked priceof such common equity, as of February 8, 2007: $3,051,070

State the number of shares outstanding of each of the issuer's classes ofcommon equity, as of the latest practicable date. As of December 31, 2006 therewere 76,276,760 common shares issued and outstanding.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this annual report on Form 10-KSB contain or maycontain forward-looking statements that are subject to known and unknown risks,uncertainties and other factors which may cause actual results, performance orachievements to be materially different from any future results, performance orachievements expressed or implied by such forward-looking statements. Theseforward-looking statements were based on various factors and were derivedutilizing numerous assumptions and other factors that could cause our actualresults to differ materially from those in the forward-looking statements. Thesefactors include, but are not limited to, our ability to consummate a merger orbusiness combination, economic, political and market conditions andfluctuations, government and industry regulation, interest rate risk, U.S. andglobal competition, and other factors. Most of these factors are difficult topredict accurately and are generally beyond our control. You should consider theareas of risk described in connection with any forward-looking statements thatmay be made herein. Readers are cautioned not to place undue reliance on theseforward-looking statements, which speak only as of the date of this report.Readers should carefully review this annual report in its entirety, includingbut not limited to our financial statements and the notes thereto. Except forour ongoing obligations to disclose material information under the Federalsecurities laws, we undertake no obligation to release publicly any revisions toany forward-looking statements, to report events or to report the occurrence ofunanticipated events. For any forward-looking statements contained in anydocument, we claim the protection of the safe harbor for forward-lookingstatements contained in the Private Securities Litigation Reform Act of 1995.

 

 
**PART I

Item 1. Description of Business

Business Development**
First National Power Corporation (First National) was incorporated asCapstone International Corporation on November 16, 2000, in the state ofDelaware. The Company has never declared bankruptcy, it has never been inreceivership, and it has never been involved in any legal action or proceedings.During the period from its incorporation up until the end of the period coveredby this report, the Company has not made any significant purchase or sale ofassets. 
**Business of Issuer**
First National is creating a business based on what the Company calls theFNPR Green Energy Power Generation business model. It is designed to develop andimplement cutting edge technology not formerly utilized in the electrical powergeneration industry and current technology configurations in new and excitingcommercial applications.

Principal Products and Services

First National's goal is to build a Power Company with capabilities toprovide proprietary-generating stations located on individual buildings, andPortable units for rural and emergency services with applications for ThirdWorld development. It has expanded its business goals to include investments inmore traditional and proven technologies but on a smaller scale than a fullfledged power utility grade facility. 

The Market

Compact wind turbine technology offers a near term option of generatingelectricity from clean, sustainable, renewable resources. First Nationalbelieves many homeowners, farmers, apartment and small business owners will beinterested in having the choice of how their electricity is produced and whatenvironmental impacts their consumption causes. The Company also believes manyconsumers want the type of freedom of choice First National is seeking to supplywith the development of its products.

Looking at the bigger picture, there are currently over 2 billion peoplearound the world who have no access to electrical power. First National believesthe ability to provide electrical power to this emerging market has substantialopportunity.

The Company is in the final stages of discussion and research on a number ofsmall under 20-megawatt facilities to be located in more rural and badly servedcommunities in both Canada and the US. The Company has identified more than 1technology that will transform the raw material to power, they have identifiedviable, stable and capable buyers and willing supportive communities to permitand encourage the projects.

Competition and Competitive Strategy

The environmentally friendly electrical power generation industry is in itsinfancy and currently there is very little competition throughout the world andvirtually none in many regions.

The competitive strategy of the Company is to develop efficient products andservices and to bring them to market at a cost that will allow its customers tosave money while they become energy self-sufficient. 

Of the possible new facilities, all of the potential plants are in areas thatare remote from traditional sources of utility-supplied power and are beingserved by the grid only. There are large stable and well funded users expressingwritten interest in long term purchase agreements. While there will always bethe grid as an alternative, the Company will require long term purchaseagreements to be in place before they invest in the technology, thus diminishingthe competition.

New and or Innovative Products and Services

The very nature of the environmentally friendly electrical power generationindustry is such that innovation is always being sought.

Sources and Availability of Products and Supplies

First National is not reliant on other sources for products or supplies. TheCompany is endeavoring to develop its own products and supplies through ongoingrelationships with inventors, institutions and suppliers who work closely withFirst National.

Dependence on One or a Few Major Customers

Virtually every North American, and European building owner is seeking thetypes of products and services First National is developing. Such being thecase, First National is in no way dependant on either one or a few majorconsumers. 

Patent, Trademark, License & Franchise Restrictions and ContractualObligations & Concessions

There are no inherent factors or circumstances associated with this industry,or any of the products or services that First National plans to provide thatwould give cause for any greater exposure of patent, trademark or licenseinfringements or violations than with any other commonly available technology.The Company has also not entered into any agreements or other contracts thathave given, or could give rise to obligations or concessions.

The new plants will be built under license from the patent holders, thusabrogating First National Power's need to protect any patents on the chosentechnology.

Governmental Controls and Approvals

The environmentally friendly energy generation sector does not come under anyspecial Government controls or approval processes. However, this being arelatively new and growing sector, it is possible that Government could imposenew controls or approval processes in the future.

Existing or Probable Government Regulations

Many municipalities and some states and provinces have regulations concerningthe erection of windmills and other tall and cumbersome mechanical devices.There are also the usual licensing requirements; however there are no governmentregulations that we are aware of, either existing or being contemplated, thatwould adversely affect the Company's ability to operate. Labor Standards Laws,Workplace Occupational Health and Safety Regulations, and local governmentbusiness licensing requirements are the only other government regulations thatwill affect the Company.

Research and Development Activities and Costs

First National has entered into an agreement to develop certain products, buthas not undertaken any research and development to date. It has plans toundertake research or development in the very near future. The Company is in thefinal stages of forming a contractual relationship with two large eminentinstitutions in North America, who will work with First National to develop,patent and market innovative energy generating tools.

Compliance With Environmental Laws

The only environmental laws that pertain to the Company's operations concernrestrictions on windmills in some locations and also restrictions on the type ofstructure that can be mounted on top of commercial buildings. Compliance withthese rules will not be a major issue for the Company.

The new facilities will be granted both provincial / state and federalenvironmental certificates before First National accepts ownership of theplants. 

Facilities

First National does not own or rent facilities of any kind. At present theCompany is operating from its official address that is located within theoffices of the Company's President. The Company intends to continue to operatefrom this location for as long as possible and until it has sufficient revenuesfrom sales to support a facility. First National anticipates that if any of thecurrent projects come to production, that they will need to invest in plantsthat will be operated under a contractual arrangement with qualified contractorsand they will need physical offices to control the administration andengineering oversights.

Employees

First National has no intention to hire employees in the foreseeable future.Any employees needed will be hired under a contract with an arms-length thirdparty operator. From an administrative point of view, the Company is a "VirtualManagement" model corporation. First National has no employees and managementworks under consulting contracts optimizing cash flow, as well as otherefficiencies such as facilities. The current Board of Directors is made up ofone individual who also acts as the officer of the Company. .**Reports to Security Holders**
First National will voluntarily make available to securities holders anannual report, including audited financials on Form 10-K or Form 10-KSB. 

The public may read and copy any materials filed with the SEC at the SEC'sPublic Reference Room at 100 F Street NE, Washington, D.C. 20549. The public mayobtain information about the operation of the Public Reference Room by callingthe SEC at 1-800-SEC-0330. The SEC maintains an Internet site that containsreports, proxy and information statements, and other information regardingissuers that file electronically with the SEC at http://www.sec.gov.
**Item 2. Description of Property.**
First National does not own any property, real or otherwise. 

The Company does not have any investments or interests in any real estate.First National does not invest in real estate mortgages, nor does it invest inSecurities of, or interests in, persons primarily engaged in real estateactivities.
**Item 3. Legal Proceedings**
First National is not a party to any pending legal proceedings.
**Item 4. Submission of Matters to a Vote of Security Holders.**
No matter was submitted during the fourth quarter of the fiscal year endedDecember 31, 2006, to a vote of security holders, through the solicitation ofproxies or otherwise. 
**PART II****Item 5. Market for Common Equity and Related StockholderMatters.**
Market Information

The Company's stock trades on the Over-the Counter Bulletin Board (OTCBB)under the symbol FNPR. During 2006, the high and low trading price for eachquarter was as follows:****
Year    ended December 31, 2006 
High    
Low
1st    quarter, ended March 31, 2006 
    $0.189 
    $0.085
2nd    quarter, ended June 30, 2006 
    $0.178 
$0.10
3rd    quarter, ended September 30, 2006 
    $0.135 
    $0.035
4th    quarter, ended December 31, 2006 
    $0.098 
$0.04
 
Year ended December 31, 2005 
High 
Low
1st    quarter, ended March 31, 2005 
    $0.420 
    $0.070
2nd    quarter, ended June 30, 2005 
    $0.410 
    $0.250
3rd    quarter, ended September 30, 2005 
    $0.335 
    $0.075
4th    quarter, ended December 31, 2005 
    $0.100 
    $0.049
In 2005, the Board of Directors for the Company created and approved anEmployee Stock Incentive Plan (2005 ESIP). The 2005 ESIP was for 3 millionshares and is disbursed by the Board as compensation for services by officers,contractors and consultants. 

In 2005, the Board granted Peter Wanner a total of 400,000 shares for hisrole as CFO. In the financial statements, those shares are valued at $80,000.During the year, the company also issued 150,000 for legal services and 280,000to various consultants who have been working on developing various projects forFirst National. 

The Company no longer issues stock under the 2005 ESIP.

Holders.

As of December 31, 2006, the Company had forty (40) shareholders of record ofits common stock.

Dividends.

As of December 31, 2006, registrant has not paid any dividends to itsshareholders. There are no restrictions which would limit the ability of FirstNational to pay dividends on common equity or that are likely to do so in thefuture. First National does not intend to pay dividends to its shareholders inthe foreseeable future.

Recent Sales of Unregistered Securities

The Company has not sold securities during the fiscal year ended December 31,2006, without registering the securities under the Securities Act of 1933.
**Item 6. Management's Discussion and Analysis or Plan ofOperation.**
First National Power Corporation is a developmental stage Green Power companywith 3 principal projects: a Propless Wind Power Generator (PWPG), which isunder development with world renown inventor Mr. Alvin Snaper and his team ofscientists at Impactive Technology; the Green Oasis, our portable electricalgeneration and storage, water purification and satellite communication unit; andour biomass waste energy project, which is still on the drawing board and inconceptual stage.

The Company believes that compact wind turbine technology offers a near termoption of generating electricity from clean sustainable renewable resources.First National believes many homeowners, farmers, apartment and small businessowners will be interested in having the choice of how their electricity isproduced and what environmental impacts their consumption causes

The Company is in the final stages of discussion and research on a number ofsmall under 20-megawatt facilities to be located in more rural and badly servedcommunities in both Canada and the US. The Company has identified more than 1technology that will transform the raw material to power; they have identifiedviable, stable and capable buyers and willing, supportive communities to permitand encourage the projects.
480:    
Green Energy Power Generation, Green Oasis(tm) and "Project Biomass"

The Green Energy Power Generation (GEPG) business unit is designed toimplement cutting edge technology not formerly utilized in the electrical powergeneration industry. The goal is to build a Power company with proprietarygenerating stations located on customers' buildings. The continuing failure ofinternational power grids underlines the need for the technology that iscurrently being developed by First National. The Company's plan calls forindividualized power generation units to support small industry and high-risecommercial and residential complexes. 

The Green Oasis( is an Oasis of services providing direct and stored Greenenergy, water purification capabilities, internet and telephony by mobile unitsdesigned to go anywhere on a temporary or permanent basis, to become the LocalUtility, to support or become the principal source of survival in times ofdisaster. Each unit will be pre-designed on an individualized basis in a modularformat to custom fit the environment in which it will be deployed to allow formaximum utilization. They will also carry pre-charged portable satellite batterymodules that will allow individuals to transport power to specific areas on an"as needed" basis to support temporary usage in emergencies. 

The "Green Oasis" is the company's development stage project. The initialbase model has been decided upon, and consultants are working to bring togetherthe components to determine the power draw, hence the required power generationrequirements. Once that base model is actually designed and prototyped, thecompany has identified the first customer for the unit. 

The "Biomass" project will be one that will use under-license, existingtechnologies from one of a number of available suppliers. The Company hasgathered letters of interest from buyers of wholesale power, letters of supportfrom communities willing to license and support such a project, gathered lettersof intent from interested suppliers of raw material and been in discussions withpotential operators of the facilities. There are 4 separate, distinct andunrelated projects, all to use such Biomass technology that the Company has beenactively moving forward on. 

Organizational Structure

The Company has no employees and Management works under consulting contractsoptimizing cash flow and infrastructure efficiencies. The current Board is madeup of one individual who also acts as the Officer of the company. Professionalsin their individual fields supply all other services on an "as needed" basis.

Growth, Revenue & Financial Plans 

The Company has recently received a loan from York Truck. Management believesthe funds now available to the Company will be sufficient to see them to theconclusion of a first tranche financing of one of the projects currently indevelopment. Once the financing for any of the projects is underway, there willbe sufficient funds available to fund the necessary administration. 

During 2004, the company sold share subscriptions to outgoing directors andofficers providing some of the funding for the year. Certain non-auditingprofessional fees were covered through the issuance of shares.. The 2005 ESIPprovided shares that paid for the officer and director for 2004 and for aportion of 2005. An unrelated party lent the Company $20,581, which paid anumber of administrative expenses. That loan is non-interest bearing and has nospecific repayment date. 

In the current year, the company is anticipating moving gradually from thedevelopment stage to one of operations. To accomplish that transformation, thecompany will be required to raise funds. If the company does solidify a planthat will require funding, they will be seeking either partners that willprovide the funding or they will be offering debt financing, dependant upon thecompletion of the Company's business plan. Other expenses administrative innature will be paid by related and unrelated parties through loans or othermeans, including the sale of common or preferred stock.

The Company had no off balance sheet transactions during 2006, and expectsthat as part of the financing options for the projects currently contemplated,that there may well be a need to finance using such alternative financingoptions in 2007.**Item 7. Financial Statements****FIRST NATIONAL POWER CORPORATION**(A Development Stage Company)**FINANCIAL STATEMENTS**December 31, 2006**Together with Report of Independent Registered Public    Accounting Firm**(Amounts expressed in US Dollars)
 

 

 

 
** 

 ****FIRST NATIONAL POWER CORPORATION**(A Development Stage Company)**FINANCIAL STATEMENTS**December 31, 2006**Together with Report of Independent Registered Public      Accounting Firm**(Amounts expressed in US Dollars)**TABLE OF CONTENTSReport of Independent Registered Public Accounting Firm
1Independent Accountant's Report
2Balance Sheets as of December 31, 2006 and December 31, 2005
3Statements of Operations for the years endedDecember 31, 2006 and December 31, 2005
4Statements of Cash Flows for the years endedDecember 31, 2006 and December 31, 2005
5Statements of Changes in Stockholders' Deficiency for theyears ended December 31, 2006 and December 31, 2005
6Notes to Financial Statements
7 - 11**SchwartzLevitsky Feldman llp**
CHARTERED ACCOUNTANTS

LICENSED PUBLIC ACCOUNTANTS

TORONTO MONTREAL

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of    Directors and Stockholders of

First National    Power Corporation

(A Development    Stage Company)

We have audited the accompanying balance sheets of First    National Power Corporation (incorporated in Delaware) as at December 31,    2006 and 2005 and the related statements of operations, cash flows and    stockholders' deficiency for the years ended December 31, 2006, 2005 and    2004. These financial statements are the responsibility of the Company's    management. We did not audit the financial statements of the Company from    the date of inception to December 31, 2003, which statements reflect    cumulative total assets of $Nil as of December 31, 2003 and cumulative    expenses of $158,215 for the period from inception to December 31, 2003.    Those statements were audited by another auditor whose report has been    furnished to us, and our opinion, insofar as it relates to the cumulative    financial information from inception to December 31, 2003, is based solely    on the report of the other auditor.
We conducted our audits in accordance with the standards    of the Public Company Accounting Oversight Board (United States). Those    standards require that we plan and perform the audits to obtain reasonable    assurance about whether the financial statements are free of material    misstatement. An audit includes examining, on a test basis, evidence    supporting the amounts and disclosures in the financial statements. An audit    also includes assessing the accounting principles used and significant    estimates made by management, as well as evaluating the overall financial    statement presentation. We believe that our audits and the report of the    other auditor provides a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the    other auditor, the financial statements referred to above present fairly, in    all material respects, the financial position of First National Power    Corporation as at December 31, 2006 and 2005 and the results of its    operations and its cash flows for the years ended December 31, 2006 and 2005    and for the period from inception to December 31, 2006 in accordance with    generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming the    Company will continue as a going concern. As discussed in note 2 to the    financial statements, the Company is a development stage company and has no    established source of revenues. These conditions raise substantial doubt    about its ability to continue as going concern. The financial statements do    not include any adjustments that might result from the outcome of this    uncertainty.

 

"SCHWARTZ LEVITSKY FELDMAN LLP"

Toronto, Ontario,                                                                                    Canada Chartered Accountants

February 28, 2007                                                                                      Licensed Public Accountants

                   1167 Caledonia Road
                          Toronto, Ontario M6A 2X1

                          Tel: 416 785 5353

                          Fax: 416 785 5663

 

 

 

 

 
**FIRST NATIONAL POWERCORPORATION

(A Development StageCompany)

Notesto Financial Statements

December 31, 2006

(Amounts expressed inUS Dollars)**
 

 
**1        GENERAL

The Company was incorporated on November 16, 2000 under the laws of the  State of Delaware. The business purpose of the Company was to acquire funeral  facilities and the selling of prepaid funeral programs. In January of 2004 the  Company changed its business purpose to provision of wind-driven solutions to  power generation requirements. Current projects for the company are the  completion of commercialization of a number of power generation projects from  bio-mass technologies
**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 December  31, 2006. These conditions raise substantial doubt about the Company's ability  to continue as a going concern.
**3        SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES****a)    Use of Estimates**
These financial statements have been prepared in accordance with generally  accepted accounting principles in the United States of America. Because a  precise determination of assets and liabilities, and correspondingly revenues  and expenses, depend on future events, the preparation of financial statements  for any period necessarily involves the use of estimates and assumptions.  Actual amounts may differ from these estimates. These financial statements  have, in management's opinion, been properly prepared within reasonable limits  of materiality and within the framework of the accounting policies summarized  below.
**b)    Financial Instruments**
The carrying amount of the Company's accounts payable and accrued  liabilities approximates fair value because of the short maturity of these  instruments.
**c)    Income Taxes**
The Company accounts for income taxes under the provisions of Statement of  Financial Accounting Standards No. 109, which requires recognition of deferred  tax assets and liabilities for the expected future tax consequences of events  that have been included in the financial statements or tax returns. Deferred  income taxes are provided using the liability method. Under the liability  method, deferred income taxes are recognized for all significant temporary  differences between the tax and financial statement bases of assets and  liabilities.

Current income tax expense (recovery) is the amount of income taxes  expected to be payable (recoverable) for the current year. A deferred tax  asset and/or liability is computed for both the expected future impact of  differences between the financial statement and tax bases of assets and  liabilities and for the expected future tax benefit to be derived from tax  losses. Valuation allowances are established when necessary to reduce the  deferred tax asset to the amount expected to be "more likely than not" to be  realized in future returns. Tax law and rate changes are reflected in income  in the period such changes are enacted.
**d)    Earnings or Loss Per Share**
The Corporation has adopted FSA No. 128, "Earnings per Share", which  requires disclosure on the financial statements of "basic" and "diluted"  earnings (loss) per share. Basic earnings (loss) per share is computed by  dividing net income (loss) by the weighted average numbers of common shares  outstanding for the year. Diluted earnings (loss) per share is computed by  dividing net income (loss) by the weighted average number of common shares  outstanding plus common stock equivalents (if dilutive) related to stock  options and warrants for each year.
**e)    Comprehensive Income**
The Company has adopted SFAS No. 130, "Reporting Comprehensive Income."  This statement establishes standards for reporting comprehensive income and  its components in a financial statement. Comprehensive income as defined  includes all changes in equity (net assets) during a period from non-owner  sources. Examples of items to be included in comprehensive income, which are  excluded from net income, include foreign currency translation adjustments and  unrealized gains and losses on available-for-sale securities. Comprehensive  income (loss) is not presented in the Company's financial statements since  there is no difference between net loss and comprehensive loss in any period  presented.
**f)    Recent Pronouncements**
SFAS 152 - In December 2004, the FASB issued SFAS No. 152 "Accounting for  Real Estate Time-Sharing Transactions - an amendment of FASB Statements No. 66  and 67" ("SFAS 152"). This statement amends FASB Statement No. 66 "Accounting  for Sales of Real Estate" to reference the financial accounting and reporting  guidance for real estate time-sharing transactions that is provided in AICPA  Statement of Position 04-2 "Accounting for Real Estate Time-Sharing  Transactions" ("SOP 04-2"). SFAS 152 also amends FASB Statement No. 67  "Accounting for Costs and Initial Rental Operations of Real Estate Projects"  to state that the guidance for incidental operations and costs incurred to  sell real estate projects does not apply to real estate time-sharing  transactions, with the accounting for those operations and costs being subject  to the guidance in SOP 04-2. The provisions of SFAS 152 are effective in  fiscal years beginning after June 15, 2005.

SFAS 153 - In December 2004, the FASB issued SFAS No. 153 "Exchanges of  Non-monetary Assets - an amendment of APB Opinion No. 29" ("SFAS 153"). SFAS  153 replaces the exception from fair value measurement in APB Opinion No. 29  for non-monetary exchanges of similar productive assets with a general  exception from fair value measurement for exchanges of non-monetary assets  that do not have commercial substance. A non-monetary exchange has commercial  substance if the future cash flows of the entity are expected to change  significantly as a result of the exchange. SFAS 153 is effective for all  interim periods beginning after June 15, 2005.

SFAS 154- In May 2005, the FASB issued SFAS 154 "Accounting Changes and  Error Corrections". The statement replaces APB Opinion No. 20, Accounting  Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial  Statements. SFAS 154 requires companies to apply voluntary changes in  accounting principles retrospectively whenever practicable. SFAS 154 is  effective for accounting changes and correction of errors made in fiscal years  beginning after December 15, 2005. 

In February 2006, FASB issued SFAS No. 155, "Accounting for Certain Hybrid  Financial Instruments". SFAS No. 155 amends SFAS No 133, "Accounting for  Derivative Instruments and Hedging Activities", and SFAF No. 140, "Accounting  for Transfers and Servicing of Financial Assets and Extinguishments of  Liabilities". SFAS No. 155, permits fair value remeasurement for any hybrid  financial instrument that contains an embedded derivative that otherwise would  require bifurcation, clarifies which interest-only strips and principal-only  strips are not subject to the requirements of SFAS No. 133, establishes a  requirement to evaluate interest in securitized financial assets to identify  interests that are freestanding derivatives or that are hybrid financial  instruments that contain an embedded derivative requiring bifurcation,  clarifies that concentrations of credit risk in the form of subordination are  not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition  on the qualifying special-purpose entity from holding a derivative financial  instrument that pertains to a beneficial interest other than another  derivative financial instrument. This statement is effective for all financial  instruments acquired or issued after the beginning of the Company's first  fiscal year that begins after September 15, 2006. 

In March 2006, the FASB issued SFAS No. 156. This Statement amends FASB  Statement No. 140, Accounting for Transfers and Servicing of Financial Assets  and Extinguishments of Liabilities, with respect to the accounting for  separately recognized servicing assets and servicing liabilities. This  Statement is effective as of the beginning of its first fiscal year that  begins after September 15, 2006. An entity should apply the requirements for  recognition and initial measurement of servicing assets and servicing  liabilities prospectively to all transactions after the effective date of this  Statement. 

In September 2006, the FASB issued SFAS No. 157 and No. 158. Statement No.  157 defines fair value, establishes a framework for measuring fair value in  generally accepted accounting principles (GAAP), and expands disclosures about  fair value measurements. This Statement applies under other accounting  pronouncements that require or permit fair value measurements, the Board  having previously concluded in those accounting pronouncements that fair value  is the relevant measurement attribute. Accordingly, this Statement does not  require any new fair value measurements. However, for some entities, the  application of this Statement will change current practice. 

Statement No. 158 is an amendment of FASB Statements No. 87, 88, 106, and  132(R). It improves financial reporting by requiring an employer to recognize  the over funded or under funded status of a defined benefit postretirement  plan (other than a multiemployer plan) as an asset or liability in its  statement of financial position and to recognize changes in that funded status  in the year in which the changes occur through comprehensive income of a  business entity or changes in unrestricted net assets of a not-for-profit  organization. This Statement also improves financial reporting by requiring an  employer to measure the funded status of a plan as of the date of its year-end  statement of financial position, with limited exceptions.

The Company believes that the above standards would not have a material  impact on its financial position, results of operations or cash flows.
**4         ACCOUNTS PAYABLE ANDACCRUED LIABILITIES**
Accounts payable and accrued liabilities are comprised of the following
  **2006

 
**2005**Trade Payables 
$8,074
 
$19,608Accrued      Liabilities 
$15,000
 
$  5,000
$                   
 
$                   
In Trade Payables the amount owing to the officer / director is $1,618  ($10,932 in 2005)

 
**5        LOANS FROM SHAREHOLDERS

The loans are unsecured, non-interest bearing and have no specific terms of  repayment. The fair value of the loans has been estimated by discounting  future cash flows using an estimated rate of return of 5% per annum. The fair  value amounts to $246,000. In accounts payable the company has recorded an  amount owing to the officer / director of the company in the amount of $1,618  ($10,932 in 2005).

 
**6      CAPITAL STOCK

a)     Authorized

100,000,000 Common shares with a par value of $0.001 per share

b) **    Issued
76,276,260 Common shares (76,276,760 in 2005)

c) **      Changes to Issued Share Capital
In February 2005, the Board of Directors approved the 2005 Employee Share  Incentive Plan allowing management to issue up to 3 million shares as  incentive for officers and employees or as payment in kind for services  supplied by consultants. During the year ended December 31, 2005 , the company  issued 400,000 shares to an officer for services performed, 140,000 shares for  legal services and 290,000 shares to consultants who worked on various company  projects. These shares have been recorded at the fair market values of the  services rendered.

d) **      Stock Subscription Agreements
The company has executed subscription agreements to sell 136,000 shares of  its common stock at a price or $0.50 per share, and 10,000 shares at $0.25 per  share for a total of $70,500.

 
**7        INCOME TAXES

a)       Deferred Income Taxes

The tax effect of significant temporary differences that gave rise to the  benefit is as follows:
  **2006

 **2005Operating Losses      Available to offset future taxes 
$78,650 
$38,675Valuation      Allowance 
($78,650) 
($38,675)      Net Deferred Assets
$         0 
$                    
The Company has determined that realization of a deferred tax asset is not  likely and therefore a valuation allowance has been recorded against this  deferred income tax asset.
**b)        Current Income Taxes

The Company has certain non-capital losses of approximately $242,000  available, which can be applied against future taxable income and which  expires between 2025 and 2026.
**8         PROJECT DEVELOPMENT COSTS

In accordance with generally accepted accounting principles, fees and  expenses incurred while developing a project cannot be capitalized until there  is a reasonable expectation of a revenue stream. As the company is still in  the very early stages of development on the Green Oasis and the Prop-less Wind  Power Generator, it was determined that costs incurred to date had to be  expensed.
****
 
**Item 8. Changes in and Disagreements with Accountants onAccounting and Financial Disclosures.

On August 3, 2004, the Company retained the services of Schwartz-LevitskyFeldman, LLP, Certified Public Accountants, to act as the auditor for theCompany. There are no disagreements between the Company and the auditor
**Item 8A. Disclosure Controls and Procedures**
As of December 31, 2006, the Company carried out an evaluation of theeffectiveness of the Company's disclosure controls and procedures (as defined byRule 13a-14(c) under the Securities Exchange Act of 1934) under the supervisionand with the participation of the Company's Chief Executive Officer and ChiefFinancial Officer. Based on and as of the date of such evaluation, theaforementioned officers have concluded that the Company's disclosure controlsand procedures were effective.

The Company also maintains a system of internal accounting controls that isdesigned to provide assurance that assets are safeguarded and that transactionsare executed in accordance with management's authorization and properlyrecorded. This system is continually reviewed and is augmented by writtenpolicies and procedures, the careful selection and training of qualifiedpersonnel and an internal audit program to monitor its effectiveness. During thefiscal year ended December 31, 2006, there were no significant changes to thissystem of internal controls or in other factors that could significantly affectthose controls.**Item 8B. Other Information**
No events required to be reported on Form 8K occurred during the fourthquarter of the fiscal year ended December 31, 2006. 

 
**PART III

Item 9. Directors, Executive Officers, Promoters and ControlPersons; Compliance with Section 16(a) of the Exchange Act**
Peter Wanner, Director, Treasurer, Chief Financial Officer. Mr. Wanner,age 53, has 13 years experience as a business consultant to start-up companies,as well as companies in refinancing and turnaround. He also has 15 years ofexperience in financing accounting, including 2 years in public accounting aswell as international experience working in Mexico, United Kingdom and UnitedStates. Mr. Wanner has served as a director since May 4, 2004. The term ofoffice for any director is for a period of one year, or until the next annualmeeting (or special meeting in lieu of an annual) of the shareholders.****
Significant Employees. Other than it's executive officer and director,the Company has no other employees.

No officer or director of the Company has been, within the past five years,involved in any legal proceedings, including bankruptcy, criminal proceedings orcivil, nor are they subject to any order, judgment or decree, not subsequentlyreversed, suspended or vacated, of an court of competent jurisdiction,permanently or temporarily enjoining, barring, suspending or otherwise limitinghis involvement in any type of business, securities or banking activities.

The Board of Directors does have Peter Wanner, who is a qualified accountantcertified in Canada and Ontario to act as an audit committee financial expertserving on its audit committee. 

Compliance with Section 16(a) of the Exchange Act.

As of the date of filing this report, the Company is not aware of any personwho, at any time during the year ended December 31, 2006, was a director,officer, beneficial owner of more than ten percent of any class of equitysecurities of the registrant that failed to file on a timely basis reportsrequired by Section 16(a) during the most recent fiscal year or prior years.

Code of Ethics

As of the date of filing this report, the Company has not adopted a Code ofEthics.****
. 
**Item 10. Executive Compensation.

First National's Executive officers do not currently receive and are notaccruing any compensation.
**Item 11. Security Ownership of Certain Beneficial Ownersand Management.

The following is a table detailing the current shareholders of our stock asof December 31, 2006, who own 5% or more of the common stock, and shares ownedby our Directors and Officers:

Title of

Class
Name and Address of Beneficial    Owner
Amount and

Nature of

Beneficial

Ownership
Percent

of ClassCommonPeter Wanner***
165,000
0.002%CommonDirectors and    officers as a group (3)
165,000
0.002%**Item 12. Certain Relationships and Related Transactions.

No persons who may, in the future, be considered a promoter will receive orexpect to receive assets, services or other consideration from the Company. Noassets will be or are expected to be acquired from any promoter on behalf of ourcompany. We have not entered into any agreements that require disclosure to ourshareholders.
**Item 13. Exhibits**
Exhibits
Exhibit No.DocumentLocation3.1Articles of    IncorporationPreviously Filed3.2BylawsPreviously filed31Sect. 302 CertificationIncluded32Sect. 906 CertificationIncluded
 
**Item 14. Principal Accountant Fees and Services**
1. Audit Fees: Aggregate fees billed for each of the last two (2) fiscalyears for professional services rendered by the principal accountant for theaudit of the annual financial statements and review of financial statementsincluded on Form 10-QSB: 

2005: $9,391

2006: $9,391

2. Audit-Related Fees: Aggregate fees billed in each of the last two (2)fiscal years for assurance and related services by the principal accountant thatare reasonably related to the performance of the audit or review of thefinancial statements and are not reported previously.

2005: $0

2006: $0

3. Tax Fees: Aggregate fees billed in each of the last two (2) fiscal yearsfor professional services rendered by the principal accountant for taxcompliance, tax advice, and tax planning. 

2005: $0

2006: $0

4. All Other Fees: Aggregate fees billed in each of the last two (2) fiscalyears for products and services provided by the principal accountant, other thanthe services previously reported.

2005: $0

2006: $0

5. Audit Committee Pre-Approval Procedures. The Board of Directors has not,to date, appointed an Audit Committee.****
 

 
**Signatures**
In accordance with Section 13 or15(d) of the Exchange Act, the registrant caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.

FIRST NATIONAL POWER CORPORATION

 
***/s/ Peter Wanner***
Peter Wanner, CFO

Dated: **March 14, 2007           **

 

In accordance with the Exchange Act,this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.

 
***/s/ Peter Wanner***
Peter Wanner, CFO, Treasurer,Director

Dated: **March 14, 2007           ************************************************************

**