---

SECURITIES AND
EXCHANGE COMMISSION



Washington, D.C. 20549





Form 10-KSB





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



Date of Report: December 31, 2004



FIRST NATIONAL POWER
CORPORATION

Formerly Capstone
International Corporation

(Exact name of
registrant 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 Bellevue
Way NE

Bellevue, WA 98004

(Address of principal
executive offices)





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



(Mark One)



[X] Annual report pursuant to Section
13 or 15(d) of the securities exchange act of 1934 for the fiscal year ended
December 31, 2004.



[ ] Transition report under Section
13 or 15(d) of the securities exchange act 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 by
Section 13 or 15(d) of the Exchange Act during the past 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

Check if there is no disclosure of delinquent filers in response to Item 405
or Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [X]

State issuer's revenues for its most recent fiscal year: As of December 31,
2004, the Company has not generated any revenues.

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the average bid and asked price
of such common equity, as of March 23, 2005: $27,899,391.

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. As of December 31, 2004 there
were 75,447,260 common shares issued and outstanding.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

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

---

PART I

Item 1. Description of Business

Business Development

First National Power Corporation (First National) was incorporated as
Capstone International Corporation on November 16, 2000, in the state of
Delaware. The Company has never declared bankruptcy, it has never been in
receivership, 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 covered
by this report, the Company has not made any significant purchase or sale of
assets.

Business of Issuer

First National is creating a business based on what the Company calls the
FNPR Green Energy Power Generation business model. It is designed to develop and
implement cutting edge technology not formerly utilized in the electrical power
generation industry and current technology configurations in new and exciting
commercial applications.

Principal Products and Services

First National's goal is to build a Power Company with capabilities to
provide proprietary-generating stations located on individual buildings, and
Portable units for rural and emergency services with applications for Third
World development.

The Market

Compact wind turbine technology offers a near term option of generating
electricity from clean sustainable renewable resources. First National believes
many homeowners, farmers, apartment and small business owners will be interested
in having the choice of how their electricity is produced and what environmental
impacts their consumption causes. The Company also believes many consumers want
the type of freedom of choice First National is seeking to supply with the
development of its products.

Looking at the bigger picture, there are currently over 2 billion people
around the world who have no access to electrical power. First National believes
the ability to provide electrical power to this emerging market has substantial
opportunity.

Wind power currently meets 2% of total European electricity demand. European
Wind Power Association (EWEA) chief executive Corin Millais stated, "This is
just the tip of the iceberg; the global wind power market could be worth e25
billion a year by 2010. That traunch will increase rapidly as the technology
continues to develop, costs continue to fall, and the need to secure and
diversify electrical energy becomes increasingly evident to decision makers,"
said EWEA (European Wind Power Association) chief executive Corin Millais.

Competition and Competitive Strategy

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

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

New and or Innovative Products and Services

The very nature of the environmentally friendly electrical power generation
industry 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. The
Company is endeavoring to develop it own products and supplies through ongoing
relationships with inventors and suppliers such as Alvin Snapper who works
closely with First National.

Dependence on One or a Few Major Customers

Virtually every North American, and European building owner is seeking the
types of products and services First National is developing. Such being the
case, First National is in no way dependant on either one or a few major
consumers.

Patent, Trademark, License & Franchise Restrictions and Contractual
Obligations & 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 that
would give cause for any greater exposure of patent, trademark or license
infringements or violations than with any other commonly available technology.
The Company has also not entered into any agreements or other contracts that
have given, or could give rise to obligations or concessions.

Governmental Controls and Approvals

The environmentally friendly energy generation sector does not come under any
special Government controls or approval processes. However, this being a
relatively new and growing sector, it is possible that Government could impose
new controls or approval processes in the future.



Existing or Probable Government Regulations

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

Research and Development Activities and Costs

First National has entered into a agreement to develop certain products, but
has not undertaken any research and development to date, nor does it have any
plans to undertake any research or development in the future.

Compliance With Environmental Laws

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

Facilities

First National does not own or rent facilities of any kind. At present the
Company is operating from its official address that is located within the
offices of the Company's President. The Company intends to continue to operate
from this location for as long as possible and until it has sufficient revenues
from sales to support a facility. First National anticipates no need for
additional space during the next year of operations, however, if growth occurs
faster then expected the Company would make every effort to find facilities that
offer long-term adaptability to growth.

Employees

First National has no intention to hire employees in the foreseeable future.
The Company is a "Virtual Management" model corporation. First National has no
employees and management works under consulting contracts optimizing cash flow,
as well as other efficiencies such as facilities. The current Board of Directors
is made up of two individuals who also act as the officers of the Company.
Professionals in their respective fields provide all other services on an
as-needed basis. The Company also has an advisory Board chaired by Mr. Alvin
Snapper.

Reports to Security Holders

First National will voluntarily make available to securities holders an
annual 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's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information about the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers 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. For the next
year, the Company intends to operate from the President's office at his
residence, at no cost to the Company.

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 in
Securities of, or interests in, persons primarily engaged in real estate
activities.

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 ended
December 31, 2004, to a vote of security holders, through the solicitation of
proxies or otherwise.

---



PART II



Item 5. Market for Common Equity and Related Stockholder Matters.

Market Information

The Company's stock trades on the Over-the Counter Bulletin Board (OTCBB)
under the symbol FNPR. During 2004, the average trading price for each quarter
was as follows:

> 1st quarter, ended March 31, 2004            
>   $0.5115
>   2nd quarter, ended June 30, 2004             
>   $0.2595
>   3rd quarter, ended September 30, 2004     
>   $0.24825
>   4th quarter, ended December 31, 2004      
>   $0.1243

Holders.

As of December 31, 2004, the Company had thirty-six (36) shareholders of
record of its common stock.

Dividends.

As of December 31, 2004, registrant has not paid any dividends to its
shareholders. There are no restrictions which would limit the ability of First
National to pay dividends on common equity or that are likely to do so in the
future. First National does not intend to pay dividends to its shareholders in
the foreseeable future.

Recent Sales of Unregistered Securities

We have not sold securities during the fiscal year ended December 31, 2004,
without registering the securities under the Securities Act of 1933.

Item 6. Management's Discussion and Analysis or Plan of Operation.

First National Power Corporation is a developmental stage Green Power company
with 3 principal projects: a Propless Wind Power Generator (PWPG), which is
under development with world renown inventor Mr. Alvin Snaper and his team of
scientists at Impactive Technology; the Green Oasis, our portable electrical
generation and storage, water purification and satellite communication unit;
and, our biomass waste energy project, which is still on the drawing board and
conceptual stage.

The Company believes that compact wind turbine technology offers a near term
option of generating electricity from clean sustainable renewable resources.
First National believes many homeowners, farmers, apartment and small business
owners will be interested in having the choice of how their electricity is
produced and what environmental impacts their consumption causes. The Company
also believes many consumers want the type of freedom of choice First National
is seeking to supply with the development of its products.

Looking at the bigger picture, there are currently over 2 billion people
around the world who have no access to electrical power. First National believes
the ability to provide electrical power to this emerging market has substantial
opportunity. We believe that that share will increase rapidly as the technology
continues to develop, costs continue to fall, and the need to secure and
diversify energy supply becomes increasingly evident to decision makers.

Wind power currently meets 2% of total European electricity demand. European
Wind Power Association (EWEA) chief executive Corin Millais stated, "This is
just the tip of the iceberg; the global wind power market could be worth e25
billion a year by 2010. That tranch will increase rapidly as the technology
continues to develop, costs continue to fall, and the need to secure and
diversify electrical energy becomes increasingly evident to decision makers,"
said EWEA (European Wind Power Association) chief executive Corin Millais.

Green Energy Power Generation, Green Oasis (tm) and "Project Biomass"

The Green Energy Power Generation (GEPG) business unit is designed to
implement cutting edge technology not formerly utilized in the electrical power
generation industry. The goal is to build a Power company with proprietary
generating stations located on customers' buildings. The continuing failure of
international power grids underlines the need for the technology that is
currently being developed by First National. The Company's plan calls for
individualized power generation units to support small industry and high-rise
commercial and residential complexes. The Company expects that buildings powered
by First National power systems will be the only buildings with electrical power
during local and regional power failures.

The Green Oasis (tm) is an Oasis of services providing direct and stored Green
energy, water purification capabilities, internet and telephony by a mobile
units designed to go anywhere on a temporary or permanent basis, to become the
Local Utility, to support or become the principal source of survival in times of
disaster. Each unit will be pre-designed on an individualized basis in a modular
format to custom fit the environment in which it will be deployed to allow for
maximum utilization. They will also carry pre-charged portable satellite battery
modules that will allow individuals to transport power to specific areas on an
"as needed" basis to support temporary usage in emergencies.

The "Project Biomass" is the Company's developmental stage project, however
it is only in drawing board form at present.

Organizational Structure

First National is a "Virtual Management" model corporation. The Company has
no employees and Management works under consulting contracts optimizing cash
flow and infrastructure efficiencies. The current Board is made up of one
individual who also acts as the Officer of the company. Professionals in their
individual fields supply all other services on an "as needed" basis. The Company
also has an Advisory Board, Chaired by Alvin Snaper.

Growth, Revenue & Financial Plans

The Company is currently exploring its options for additional financing which
is needed for operating expenses, marketing, and the acquisition of additional
synergistic technology. The Company's first priority is to complete our
proprietary product development, establish brand awareness, and to launch
effective marketing efforts for its product. The Company also intends to
actively pursue partnerships with other Green Energy developers, leveraging its
technology, intellectual properties, and to make its position known as quickly
as possible amongst the other players on the world stage. The Company has
identified other potential acquisitions and will aggressively pursue the
opportunities as part of its strategic growth strategy. First National Power is
growth-focused on a corporate strategy of Build, Buy or Partner with premier
industry individuals and companies with visionary management.

Item 7. Financial Statements

---



FIRST NATIONAL POWER CORPORATION

(Formerly Capstone International Corporation)

(A Development Stage Company)

FINANCIAL STATEMENTS

December 31, 2004

Together with Report of Independent Registered Public
Accounting Firm

(Amounts expressed in US Dollars)



---



FIRST NATIONAL POWER
CORPORATION

(Formerly Capstone
International Corporation)

(A Development Stage
Company)

FINANCIAL STATEMENTS

December 31, 2004

Together with Report
of Independent Registered Public Accounting Firm

(Amounts expressed in
US Dollars)



TABLE OF CONTENTS



Report of Independent Registered Public Accounting Firm                                                        
1

Independent Accountant's Report                                                                                           
2

Balance Sheets as of December 31, 2004 and December 31, 2003                                           
3

Statements of Operations for the years ended
December 31, 2004 and December 31, 2003                                                                           
4

Statements of Cash Flows for the years ended
December 31, 2004 and December 31, 2003                                                                           
5

Statements of Changes in Stockholders' Deficiency for the
years ended December 31, 2004 and December 31, 2003                                                        
6

Notes to Financial Statements                                                                                            
7 - 9



---





Schwartz Levitsky Feldman llp

CHART E RED ACCOU N T ANT S

T O RONT O, M O NT REAL, OT T A W A

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 sheet of First
National Power Corporation (incorporated in Delaware) as at December 31, 2004
and the related statements of operations, cash flows and stockholders'
deficiency for the year ended December 31, 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 $107,245 for the period form 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 audit in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit 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
audit and the report of the other auditor provides a reasonable basis for our
opinion.

In our opinion, based on our audit 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, 2004 and the results of its operations and its cash flows for
the year ended December 31, 2004 and for the period from inception to December
31, 2004 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.

The financial statements of First National Power Corporation
as of December 31, 2003 were audited by another auditor whose report dated April
13, 2004, expressed a qualified opinion on those financial statements.

"SCHWARTZ LEVITSKY
FELDMAN LLP"

Chartered
Accountants

Toronto, Ontario,
Canada

March 21, 2005

> 1167 Cal e donia Road
>       T oronto, Onta rio M6A 2X1
>       T el: 416 785 5353
>       F a x: 416 785 5663

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---



FIRST NATIONAL POWER
CORPORATION

(Formerly Capstone
International Corporation)
(A Development Stage Company)
Balance Sheets
As of December 31, 2004 and December 31, 2003 
(Amounts expressed in US Dollars)



|                         |                                                       | 2004      |  | 2003     
|------------------------ | ----------------------------------------------------- | --------- |  | ---------
|                         |                                                       | $         |  | $        
|ASSETS                   |                                                       |           |  |          
|                         | CURRENT ASSETS                                        |           |  |          
|                         |                                                       |           |  |          
|                         | Cash                                                  | 8,645     |  |          
|                         | Prepaid expenses and deposits                         | 1,500     |  |          
|                         |                                                       | 10,145    |  | -        
|                         |                                                       |           |  |          
|LIABILITIES              |                                                       |           |  |          
|                         | CURRENT LIABILITIES                                   |           |  |          
|                         | Accounts payable and accrued
    liabilities (note 4) | 19,821    |  | 7,866    
|                         | Loans from shareholders (note 5)                      | 20,581    |  | 43,394   
|                         |                                                       | 40,402    |  | 51,260   
|                         |                                                       |           | 
|                         |                                                       |           | 
|STOCKHOLDERS' DEFICIENCY |                                                       |           | 
|                         |                                                       |           |  |          
|                         | CAPITAL STOCK (note 6)                                | 75,448    |  | 10,768   
|                         |                                                       |           |  |          
|                         | CAPITAL STOCK SUBSCRIBED                              | 146       |  |          
|                         |                                                       |           |  |          
|                         | ADDITIONAL PAID-IN-CAPITAL                            | 127,777   |  | 96,186   
|                         |                                                       |           |  |          
|                         | DEFICIT, ACCUMULATED DURING THE
    DEVELOPMENT STAGE | (233,628) |  | (158,214)
|                         |                                                       | (30,257)  |  | (51,260) 
|                         |                                                       |           |  |          
|                         |                                                       | 10,145    |  | -        

The accompanying notes are an integral part of these financial
statements







APPROVED ON BEHALF OF THE BOARD

_______________________________________________________Director

_______________________________________________________Director

3

---

FIRST NATIONAL POWER
CORPORATION

(Formerly Capstone
International Corporation)

(A Development Stage
Company)

Statements of
Operations

For the years ended
December 31, 2004 and December 31, 2003

(Amounts expressed in
US Dollars)



|                                               |                                               | Cumulative |            |          |            |        
|---------------------------------------------- | --------------------------------------------- | ---------- | ---------- | -------- | ---------- | -------
|                                               |                                               | Since      |            |          |            |        
|                                               |                                               | Inception  |            | 2004     |            | 2003   
|                                               |                                               | $          |            | $        |            | $      
|OPERATING EXPENSES                             |                                               |            |            |          |           
|                                               | Forgiveness of accounts payable
    and loans | (47,394)   |            | (47,394) |            |        
|                                               | General and administrative
    expenses       | 226,608    |            | 70,815   |            | 106,597
|                                               | Project development costs (note
    9)        | 51,351     |            | 51,351   |            |        
|                                               | Interest                                      | 3,063      |            | 642      |            | 648    
|                                               |                                               | 233,628    |            | 75,414   |            | 107,245
|                                               |                                               |            |            |          |            |        
|NET LOSS                                       | (233,628)                                     |            | (75,414)   |          | (107,245) 
|                                               |                                               |            |            |          |            |        
|Net loss per share, basic and
    diluted      |                                               |            | $ (0.00)   |          | $ (0.00)  
|                                               |                                               |            |            |          |            |        
|Weighted average common shares
    outstanding |                                               |            | 75,409,203 |          | 74,035,130



The accompanying notes are an integral part of these financial
statements.

4



---



FIRST NATIONAL POWER
CORPORATION

(Formerly Capstone
International Corporation)

(A Development Stage
Company)

Statements of Cash
Flows

For the years ended
December 31, 2004 and December 31, 2003

(Amounts expressed in
US Dollars)



|                                         |                                               |                                               | Cumulative |          |          |           |         
|---------------------------------------- | --------------------------------------------- | --------------------------------------------- | ---------- | -------- | -------- | --------- | --------
|                                         |                                               |                                               | Since      |          |          |           |         
|                                         |                                               |                                               | Inception  |          | 2004     |           | 2003    
|                                         |                                               |                                               | $          |          | $        |           | $       
|CASH FLOWS FROM OPERATING
    ACTIVITIES |                                               |                                               |            |          |         
|                                         |                                               |                                               |            |          |          |           |         
|                                         | Net loss                                      | (233,628)                                     |            | (75,414) |          | (107,245)
|                                         | Adjustments for items not
    affecting cash  |                                               |            |          |          |          
|                                         |                                               | Shares issued for services
    rendered       | 105,900    |          | 25,900   |           | 80,000  
|                                         |                                               | Forgiveness of accounts payable
    and loans | (47,394)   |          | (47,394) |           |         
|                                         |                                               | (Increase) in prepaid expenses                | (1,500)    |          | (1,500)  |           |         
|                                         |                                               | Increase (decrease) in accounts
    payable   |            |          |          |           |         
|                                         |                                               | and accrued liabilities                       | 23,821     |          | 15,955   |           | (16,149)
|                                         |                                               |                                               |            |          |          |          
|                                         | Net cash used in operating
    activities     | (152,801)                                     |            | (82,453) |          | (43,394) 
|                                         |                                               |                                               |            |          |         
|CASH FLOWS FROM FINANCING
    ACTIVITIES |                                               |                                               |            |          |         
|                                         |                                               |                                               |            |          |          |           |         
|                                         | Loans from Shareholders                       |                                               | 63,975     |          | 20,581   |           | 43,394  
|                                         | Proceeds from sale of capital
    stock       | 26,954                                        |            |          |          |          
|                                         | Proceeds from capital stock
    subscriptions | 70,517                                        |            | 70,517   |          |          
|                                         |                                               |                                               |            |          |          |           |         
|                                         | Net cash provided by financing
    activities | 161,446                                       |            | 91,098   |          | 43,394   
|                                         |                                               |                                               |            |          |          |           |         
|NET INCREASE IN CASH                     | 8,645                                         |                                               | 8,645      |          |         
|                                         |                                               |                                               |            |          |          |           |         
|                                         | Cash, beginning of period                     |                                               | -          |          | -        |           | -       
|                                         |                                               |                                               |            |          |          |           |         
|CASH, END OF PERIOD                      |                                               | 8,645                                         |            | 8,645    |          | -        
|                                         |                                               |                                               |            |          |          |           |         
|INCOME TAXES PAID                        | -                                             |                                               | -          |          | -       
|                                         |                                               |                                               |            |          |          |           |         
|INTEREST PAID                            | 3,063                                         |                                               | 642        |          | 648     



The accompanying notes are an integral part of these financial
statements.

5

---





FIRST NATIONAL POWER
CORPORATION

(Formerly Capstone
International Corporation)

(A Development Stage
Company)

Statements of Changes
in Stockholders' Deficiency

From Inception until
December 31, 2004

(Amounts expressed in
US Dollars)



|                                        |        |  |            |  |            |  |            |  | Deficit    
|--------------------------------------- | ------ |  | ---------- |  | ---------- |  | ---------- |  | -----------
|                                        |        |  |            |  |            |  |            |  | accumulated
|                                        | Common |  | Stock      |  | Common     |  | Paid-In    |  | during the 
|                                        | Stock  |  | Number of  |  | Stock      |  | Capital    |  | development
|                                        | Amount |  | Shares     |  | Subscribed |  | (Discount) |  | stage      
|                                        | $      |  |            |  | $          |  | $          |  | $          
|Balance at November 16, 2000            |        |  |            |  |            |  |            |  |            
|Issuance of
    common stock for cash   | 100    |  | 100,000    |  |            |  | 900        |  |            
|Net Loss for the
    Period             |        |  |            |  |            |  |            |  | (968)      
|Balance as of December 31, 2000         | 100    |  | 100,000    |  | -          |  | 900        |  | (968)      
|                                        |        |  |            |  |            |  |            |  |            
|Issuance of
    stock for cash          | 400    |  | 400,000    |  |            |  | 3,600      |  |            
|Issuance of
    stock for cash          | 700    |  | 700,000    |  |            |  | 6,300      |  |            
|Issuance of
    stock for cash          | 850    |  | 850,000    |  |            |  | 7,650      |  |            
|Currency
    Translation                |        |  |            |  |            |  | 100        |  |            
|Net Loss for the
    Year               |        |  |            |  |            |  |            |  | (23,954)   
|Balance as of December 31, 2001         | 2,050  |  | 2,050,000  |  | -          |  | 18,550     |  | (24,922)   
|                                        |        |  |            |  |            |  |            |  |            
|Expiration of rescission offer for      |        |  |            |  |            |  |            |  |            
|sale of stock                           | 64     |  | 63,536     |  |            |  | 6,290      |  |            
|Net Loss for the
    Year               |        |  |            |  |            |  |            |  | (26,047)   
|                                        |        |  |            |  |            |  |            |  |            
|Balance as of December 31, 2002         | 2,114  |  | 2,113,536  |  | -          |  | 24,840     |  | (50,969)   
|                                        |        |  |            |  |            |  |            |  |            
|Stock split 5:1                         | 8,454  |  | 8,454,144  |  |            |  | (8,454)    |  |            
|Shares issued
    for services rendered | 200    |  | 200,000    |  |            |  | 79,800     |  |            
|Net Loss for the
    Year               |        |  |            |  |            |  |            |  | (107,245)  
|                                        |        |  |            |  |            |  |            |  |            
|Balance as of December 31, 2003         | 10,768 |  | 10,767,680 |  | -          |  | 96,186     |  | (158,214)  
|                                        |        |  |            |  |            |  |            |  |            
|Stock split 7:1                         | 64,606 |  | 64,606,080 |  |            |  | (64,606)   |  |            
|Shares issued
    for services rendered | 30     |  | 30,000     |  |            |  | 15,870     |  |            
|Shares
    subscribed                   |        |  |            |  | 146        |  | 70,371     |  |            
|Shares issued
    for services rendered | 44     |  | 43,500     |  |            |  | 9,956      |  |            
|Net Loss for the
    Year               |        |  |            |  |            |  |            |  | (75,414)   
|                                        |        |  |            |  |            |  |            |  |            
|Balance as of December 31, 2004         | 75,448 |  | 75,447,260 |  | 146        |  | 127,777    |  | (233,628)  

The accompanying notes are an integral part of these financial
statements.

6

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FIRST NATIONAL POWER
CORPORATION

(Formerly Capstone
International Corporation)
(A Development Stage Company)
Notes to Financial Statements
December 31, 2004
(Amounts expressed in US 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 the Green Oasis project, which is to be a
>   mini-utility that can provide satellite telephony, water purification or
>   desalination and power generation in the field, as well as further work on
>   bringing the Propless Wind Power Generator to commercial readiness.
>   On January 19, 2004 the Company changed its name to First National Power
>   Corporation.

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, 2004. These conditions raise substantial doubt about the Company's ability
>   to continue as a going concern

3           SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

a)  Use of Estimates

> These financial statements have been prepared in accordance with generally
>   accepted accounting principles in the United Stated of America. Because a
>   precise determination of assets and liabilities, and correspondingly revenues
>   and expenses, depends 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.

7



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e) Recent Pronouncements

> SFAS No. 149 - Amendment of SFAS 133 on derivative instruments and hedging
>   activities. This statement amends and clarifies financial accounting and
>   reporting for derivative instruments embedded in other contracts (collectively
>   referred to as derivatives) and for hedging activities under SFAS 133,
>   accounting for derivative instruments and hedging activities.
>   SFAS No. 150 - Accounting for certain financial instruments with
>   characteristics of both liabilities and equity. This statement establishes
>   standards for how an issuer classifies and measures certain financial
>   instruments with characteristics of both liabilities and equity.
>   SFAS No. 151 -"Inventory Costs, an Amendment of ARB No. 43, Chapter 4."
>   SFAS No. 151 retains the general principle of ARB No. 43, Chapter 4,
>   "Inventory Pricing," that inventories are presumed to be stated at cost;
>   however, it amends ARB No. 43 to clarify that abnormal amounts of idle
>   facilities, freight, handling costs and spoilage should be recognized as
>   current period expenses. Also, SFAS No. 151 requires fixed overhead costs be
>   allocated to inventories based on normal production capacity. The guidance in
>   SAFS No. 151 is effective for inventory costs incurred during fiscal years
>   beginning after June 15, 2005.
>   SFAS 123 (Revised) - "Share Based Payment," which will require the Company
>   to measure the cost of employee services received in exchange for an award of
>   equity instruments based on the grant-date fair value of the award. That cost
>   will be recognized over the period during which an employee is required to
>   provide service in exchange for the award--the requisite service period. No
>   compensation cost is recognized for equity instruments for which employees do
>   not render the requisite service. The grant-date fair value of employee share
>   options and similar instruments will be estimated using option-pricing models
>   adjusted for the unique characteristics of those instruments. SFAS No. 123
>   (Revised) eliminates the use of APB Opinion No. 25. SFAS No. 123 (Revised) is
>   effective for the first interim or annual reporting period that begins after
>   June 15, 2005. Early adoption for interim or annual periods for which
>   financial statements or interim reports have not been issued is encouraged.
>   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.
>   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 AND ACCRUED LIABILITIES

> Accounts payable and accrued
>       liabilities are comprised of the following2004
>       2003$
>       
>       $Trade payables
>       
>       9,821
>       
>       7,866Accrued liabilities
>       
>       10,00019,821
>       
>       7,866

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 $19,600.

6.          
CAPITAL STOCK

a)  
Authorized



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



b)  
Issued



> 75,447,260 Common shares.

8

---



c)   
Changes to Issued Share Capital

i)

ii)

operations.

iii)

iv)

operations.



v)

operations.

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.

e)  
Weighted Average Common Shares Outstanding



> Weighted average common shares outstanding have been retroactively adjusted
>   to reflect the stock splits described above.

7           INCOME TAXES



a)  
Deferred Income Taxes





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

> 2004
>           
>           2003$
>           
>           $Operating loss
>           available to offset future income taxes
>           76,000
>           
>           52,000Valuation allowance
>           (76,000)
>           
>           (52,000)Net deferred tax
>           assets
>           -
>           
>           -
>   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 $234,000
>   available, which can be applied against future taxable income and which
>   expires between 2020 and 2024.

8           AGREEMENT TO
FORM SUBSIDIARY

> On July 26, 2004, the company agreed with a Western European investor
>   group, to establish a subsidiary that would hold the licenses to the Green
>   Oasis and the Propless Wind Power Generation projects and that they would sell
>   15% of that subsidiary to the investor group for $1 million. As at the date of
>   the release of these statements, the promised funds had not arrived.
>   Management has decided that they will eventually proceed with the
>   establishment of the subsidiary, but they are no longer negotiating with that
>   investor group.

9           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.

10          SUBSEQUENT EVENTS

> On January 31, 2005, the company filed an S-8 issuing 100,000 common shares
>   at a price of $0.14 per share in lieu of paying for services.
>   On February 15, 2005, the company filed an S-8 announcing the approval of
>   the First National Power Corporation 2005 Stock Incentive Plan for Employee
>   and Consultants allocating 1 million shares to that plan.

9



---



Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures.

Effective June 15, 2004, David E. Coffey resigned as the Company's
independent auditors. There were no disagreements with Mr. Coffey on any matter
of accounting principles or practices, financial statement disclosure or
auditing or auditing scope or procedure during the two most recent fiscal
periods, or the interim period through August 3, 2004.

On august 3, 2004, the Company retained the services of Schwartz-Levitsky
Feldman, LLP, Certified Public Accountants, to act as the new auditor for the
Company.

---

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act

Peter Wanner, Director, Treasurer, Chief Financial Officer. Mr. Wanner
has 13 years experience as a business consultant to start-up companies, as well
as companies in refinancing and turnaround. He also has 14 years of experience
in financing accounting, including 2 years in public accounting as well as
international experience working in Mexico, United Kingdom and United States.
Mr. Pennell has experience as an investor relations and financial communications
consultant , including being involved in financial services, real estate, health
care, e-commerce, mining and entertainment. Mr. Pennell was Vice President of
McManus-Elliot Investor Relations for three years.

Item 10. Executive Compensation.

First National's Executive officers do not currently receive and are not
accruing any compensation.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

The following is a table detailing the current shareholders of our stock as
of December 31, 2004, who own 5% or more of the common stock, and shares owned
by our Directors and Officers:

|Title of
    Class | Name and Address of Beneficial
    Owner  | Amount and
    Nature of
    Beneficial
    Ownership | Percent
    of Class
|------------------ | ----------------------------------------- | ----------------------------------------------------- | --------------------
|Common             | Darryl Mills*                             | 3,500,000                                             | 4.6%                
|Common             | Kevin Murphy**                            | 1,400,000                                             | 1.9%                
|Common             | Peter Wanner***                           | 0                                                     | 0%                  
|Common             | Directors and
    officers as a group (3) | 4,900,000                                             | 6.5%                

* Mr. Darryl Mills resigned his position as an officer and as a Director of
the Company on September 29, 2004

** Mr. Kevin Murphy resigned his position as an officer and as a Director of
the Company on May 3, 2004

*** Mr. Peter Wanner received 200,000 shares of common stock on March 8,
2005.

Item 12. Certain Relationships and Related Transactions.

No persons who may, in the future, be considered a promoter will receive or
expect to receive assets, services or other consideration from us. No assets
will be or are expected to be acquired from any promoter on behalf of our
company. We have not entered into any agreements that require disclosure to our
shareholders.

Item 13. Exhibits and Reports on Form 8-K

Exhibits

|Exhibit No. | Document                      | Location        
|----------- | ----------------------------- | ----------------
|3.1         | Articles of
    Incorporation | Previously Filed
|3.2         | Bylaws                        | Previously filed
|31          | Sect. 302
    Certification   | Included        
|32          | Sect. 906
    Certification   | Included        

Reports on Form 8-K

No reports on Form 8-K have been filed during the last quarter of the year
ended December 31, 2004.

Signatures

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

FIRST NATIONAL POWER CORPORATION



/s/ Peter Wanner

Peter Wanner, CFO

Dated: November 30, 2005



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



/s/ Peter Wanner

Peter Wanner, CFO, Treasurer,
Director

Dated: November 30, 2005



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