----

----

|  FIRST NATIONAL ENERGY CORPORATION                            |
|--------------------------------------------------------------------|
|   (Exact name of registrant as specified in its charter) |

| Nevada                                                                      |   | 66-0349372                          |
|---------------------------------------------------------------------------------------|--------|-------------------------------------|
| (State or other jurisdictionof incorporation or organization)     |   | (I.R.S. EmployerIdentification No.) |

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

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| Consolidated Interim Balance Sheets as at September 30, 2010 (unaudited) and December 31, 2009 (audited)                                                                                              |   |   | 1      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|                                                                                                                                                                                                  |   |   |   |   |
| Consolidated  Interim Statements of Operations for the 9 month periods ended  September 30, 2010 and September 30, 2009 for the cumulative period since inception (unaudited)     |   |   | 2      |   |
|                                                                                                                                                                                                  |   |   |   |   |
| Consolidated  Interim Statements of Operations for the 3 month periods ended  September 30, 2010 and September 30, 2009 (unaudited)                                               |   |   | 3      |   |
|                                                                                                                                                                                                  |   |   |   |   |
| Consolidated  Interim Statements of Cash Flows for the 9 month periods ended  September 30, 2010 and September 30, 2009 and for the cumulative period since inception (unaudited) |   |   | 4      |   |
|                                                                                                                                                                                                  |   |   |   |   |
| Consolidated Interim Statements of Changes in Stockholders’ Equity from inception to September 30, 2010 (unaudited)                                                                             |   |   | 5-7    |   |
|                                                                                                                                                                                                  |   |   |   |   |
| Condensed Notes to Consolidated Interim Financial Statements (unaudited)                                                                                                                              |   |   | 8-11   |   |

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| FIRST NATIONAL ENERGY CORPORATION              |
|------------------------------------------------|
| (Formerly First National Power Corporation)    |
| (A Development Stage Company)                  |
| Consolidated Interim Balance Sheets            |
| As of September 30, 2010 and December 31, 2009 |
| (Amounts expressed in US Dollars)              |

|                                                    |   | September 30 |      |   | December 31 |   |
|---------------------------------------------------------|--------|--------------|-----------|--------|-------------|--------|
|                                                    |   | 2010         |      |   | 2009        |   |
|                                                    |   | $            |      |   | $           |   |
|  ASSETS                                            |   |         |      |   |        |   |   |   |
|  CURRENT ASSETS                                    |   |         |      |   |        |   |   |   |
|  Cash                                              |   |         | 105,216   |   |        |   | 36,730 |   |
|                                                    |   |         | 105,216   |   |        |   | 36,730 |   |
|                                                    |   |         |      |   |        |   |   |   |
|  License for SWEG technology, net of amortization  |   |         | 2,156,797 |   |        |   | 1,725,967 |   |
|                                                    |   |         |      |   |        |   |   |   |
|                                                    |   |         | 2,262,013 |   |        |   | 1,762,697 |   |
|                                                    |   |         |      |   |        |   |   |   |
|                                                    |   |         |      |   |        |   |   |   |
|  LIABILITIES                                       |   |         |      |   |        |   |   |   |
|  CURRENT LIABILITIES                               |   |         |      |   |        |   |   |   |
|  Accounts payable and accrued liabilities          |   |         | 8,268     |   |        |   | 14,568 |   |
|  Payable to Boreas Research for SWEG license       |   |         | 600,000   |   |        |   |   |   |
|  Loans from shareholders                           |   |         | 258,313   |   |        |   | 258,313 |   |
|                                                    |   |         | 866,581   |   |        |   | 272,881 |   |
|                                                    |   |         |      |   |        |   |   |   |
|  Going Concern (Note 2)                            |   |         |      |   |        |   |   |   |
|                                                    |   |         |      |   |        |   |   |   |
|  STOCKHOLDERS’ EQUITY                        |   |         |      |   |        |   |   |   |
|                                                    |   |         |      |   |        |   |   |   |
|  Capital Stock                                     |   |         | 99,665    |   |        |   | 99,665 |   |
|  Additional paid-in Capital                        |   |         | 2,285,701 |   |        |   | 2,185,801 |   |
|  Deficit, accumulated during the development stage |   |         | (990,004  | )      |        |   | (795,650 | ) |
|  Total FNEC Shareholders' Equity                   |   |         | 1,395,362 |   |        |   | 1,489,816 |   |
|  Non-controlling interest                          |   |         | 70        |   |        |   |   |   |
|                                                    |   |         | 1,395,432 |   |        |   | 1,489,816 |   |
|                                                    |   |         |      |   |        |   |   |   |
|                                                    |   |         | 2,262,013 |   |        |   | 1,762,697 |   |

----

| FIRST NATIONAL ENERGY CORPORATION                                                                                 |
|-------------------------------------------------------------------------------------------------------------------|
| (Formerly First National Power Corporation)                                                                       |
| (A Development Stage Company)                                                                                     |
| Consolidated Interim Statements of Operations and Comprehensive Loss                                              |
| For the 9 Month periods ended September 30, 2010 and September 30, 2009 and the cumulative period since Inception |
| (Amounts expressed in US Dollars)                                                                                 |

|                                                        |   |       |     |   | 9 Months     |   |       | 9 Months     |   |
|-------------------------------------------------------------|--------|------------|----------|--------|--------------|--------|------------|--------------|--------|
|                                                        |   | Cumulative |     |   | ended        |   |       | ended        |   |
|                                                        |   | Since      |     |   | September 30 |   |       | September 30 |   |
|                                                        |   | Inception  |     |   | 2010         |   |       | 2009         |   |
|                                                        |   | $          |     |   | $            |   |       | $            |   |
| OPERATING EXPENSES                                          |   |       |     |   |         |   |       |         |   |   |   |   |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Interest Income                                             |   |       | (6,923   | )      |         |   | (19        | )            |   |   | (74 | ) |
|  Forgiveness of accounts payable and loans             |   |       | (47,394  | )      |         |   |       |         |   |   |   |   |
|  General and administrative expenses                   |   |       | 467,077  |   |         |   | 23,430     |         |   |   | 67,821 |   |
|  Loss on Foreign Exchange                              |   |       | 2,383    |   |         |   | 1,803      |         |   |   |   |   |
|  Amortization                                          |   |       | 298,808  |   |         |   | 169,170    |         |   |   | 77,317 |   |
|  Project development costs                             |   |       | 272,857  |   |         |   |       |         |   |   |   |   |
|  Interest Expense                                      |   |       | 3,226    |   |         |   | -          |         |   |   |   |   |
|                                                        |   |       | 990,034  |   |         |   | 194,384    |         |   |   | 145,064 |   |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| NET LOSS                                                    |   |       | (990,034 | )      |         |   | (194,384   | )            |   |   | (145,064 | ) |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Net loss attributable to non-controlling interest           |   |       | (30      | )      |         |   | (30        | )            |   |   | - |   |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Net loss attributable to FNEC Shareholders                  |   |       | (990,004 | )      |         |   | (194,354   | )            |   |   | (145,064 | ) |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Net loss per share, basic and diluted                       |   |       |     |   |         | $      | (0.00      | )            |   | $ | (0.00 | ) |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Weighted average common shares outstanding                  |   |       |     |   |         |   | 99,665,228 |         |   |   | 47,495,631 |   |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| COMPREHENSIVE LOSS                                          |   |       |     |   |         |   |       |         |   |   |   |   |
| Net Loss                                                    |   |       | (990,034 | )      |         |   | (194,384   | )            |   |   | (145,064 | ) |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Other Comprehensive Loss                                    |   |       | -        |   |         |   | -          |         |   |   | - |   |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Comprehensive Loss                                          |   |       | (990,034 | )      |         |   | (194,384   | )            |   |   | (145,064 | ) |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Comprehensive Loss attributable to non-controlling interest |   |       | (30      | )      |         |   | (30        | )            |   |   | - |   |
|                                                        |   |       |     |   |         |   |       |         |   |   |   |   |
| Comprehensive Loss attributable to FNEC Shareholders        |   |       | (990,004 | )      |         |   | (194,354   | )            |   |   | (145,064 | ) |

----

| FIRST NATIONAL ENERGY CORPORATION                                       |   |
|-------------------------------------------------------------------------|--------|
| (Formerly First National Power Corporation)                             |   |
| (A Development Stage Company)                                           |   |
| Consolidated Interim Statements of Operations and Comprehensive Loss    |   |
| For the 3 Month periods ended September 30, 2010 and September 30, 2009 |   |
| (Amounts expressed in US Dollars)                                       |   |
|                                                                    |   |   |   |   |   |   |
|                                                                    |   | 3 Months |   |   | 3 Months |   |
|                                                                    |   | ended |   |   | ended |   |
|                                                                    |   | September 30 |   |   | September 30 |   |
|                                                                    |   | 2010 |   |   | 2009 |   |
|                                                                    |   | $ |   |   | $ |   |
| OPERATING EXPENSES                                                      |   |   |   |   |   |   |   |   |
| Interest Income                                                         |   |   | (2 | ) |   |   | (10 | ) |
|  Forgiveness of accounts payable and loans                         |   |   |   |   |   |   |   |   |
|  General and administrative expenses                               |   |   | 7,152 |   |   |   | 4,659 |   |
|  Loss on Foreign Exchange                                          |   |   | 1,803 |   |   |   | - |   |
|  Amortization                                                      |   |   | 61,390 |   |   |   | 46,390 |   |
|  Project development costs                                         |   |   |   |   |   |   |   |   |
|  Interest Expense                                                  |   |   | - |   |   |   |   |   |
|                                                                    |   |   | 70,343 |   |   |   | 51,039 |   |
|                                                                    |   |   |   |   |   |   |   |   |
| NET LOSS                                                                |   |   | (70,343 | ) |   |   | (51,039 | ) |
|                                                                    |   |   |   |   |   |   |   |   |
| Net loss attributable to non-controlling interest                       |   |   | (15 | ) |   |   | - |   |
|                                                                    |   |   |   |   |   |   |   |   |
| Net loss attributable to FNEC Shareholders                              |   |   | (70,328 | ) |   |   | (51,039 | ) |
|                                                                    |   |   |   |   |   |   |   |   |
| Net loss per share, basic and diluted                                   |   | $ | (0.00 | ) |   | $ | (0.00 | ) |
|                                                                    |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding                              |   |   | 99,665,228 |   |   |   | 99,665,228 |   |
|                                                                    |   |   |   |   |   |   |   |   |
| COMPREHENSIVE LOSS                                                      |   |   |   |   |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |
| Net Loss                                                                |   |   | (70,343 | ) |   |   | (51,039 | ) |
|                                                                    |   |   |   |   |   |   |   |   |
| Other Comprehensive Loss                                                |   |   | - |   |   |   | - |   |
|                                                                    |   |   |   |   |   |   |   |   |
| Comprehensive Loss                                                      |   |   | (70,343 | ) |   |   | (51,039 | ) |
|                                                                    |   |   |   |   |   |   |   |   |
| Comprehensive Loss attributable to non-controlling interest             |   |   | (15 | ) |   |   | - |   |
|                                                                    |   |   |   |   |   |   |   |   |
| Comprehensive Loss attributable to FNEC Shareholders                    |   |   | (70,328 | ) |   |   | (51,039 | ) |

----

| FIRST NATIONAL ENERGY CORPORATION                                                                                 |
|-------------------------------------------------------------------------------------------------------------------|
| (Formerly First National Power Corporation)                                                                       |
| (A Development Stage Company)                                                                                     |
| Consolidated Interim Statements of Cash Flows                                                                     |
| For the 9 Month Periods ended September 30, 2010 and September 30, 2009 and the cumulative period since inception |
| (Amounts expressed in US Dollars)                                                                                 |
|                                                                                                              |

|                                                                 |   |       |      |   | 9 Months     |   |     | 9 Months     |   |
|----------------------------------------------------------------------|--------|------------|-----------|--------|--------------|--------|----------|--------------|--------|
|                                                                 |   | Cumulative |      |   | ended        |   |     | ended        |   |
|                                                                 |   | Since      |      |   | September 30 |   |     | September 30 |   |
|                                                                 |   | Inception  |      |   | 2010         |   |     | 2009         |   |
|                                                                 |   | $          |      |   | $            |   |     | $            |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  Net loss                                                       |   |       | (990,034  | )      |         |   | (194,384 | )            |   |   | (145,064 | ) |
|  Adjustments for items not affecting cash                       |   |       |      |   |         |   |     |         |   |   |   |   |
|  Amortization                                                   |   |       | 298,808   |   |         |   | 169,170  |         |   |   | 77,317 |   |
|  Shares issued for services rendered                            |   |       | 332,390   |   |         |   | -        |         |   |   | 32,000 |   |
|  Forgiveness of accounts payable and loans                      |   |       | (47,394   | )      |         |   |     |         |   |   |   |   |
|  Increase (decrease) in accounts payable                        |   |       |      |   |         |   |     |         |   |   |   |   |
|      and accrued liabilities                |   |       | 12,267    |   |         |   | (6,300   | )            |   |   | (8,829 | ) |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  Net cash used in operating activities                          |   |       | (393,963  | )      |         |   | (31,514  | )            |   |   | (44,576 | ) |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  CASH FLOWS FROM FINANCING ACTIVITIES                           |   |       |      |   |         |   |     |         |   |   |   |   |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  Loans from Shareholders                                        |   |       | 301,708   |   |         |   | -        |         |   |   |   |   |
|  Proceeds from sale of capital stock                            |   |       | 97,471    |   |         |   |     |         |   |   |   |   |
|  Proceeds of sale of minority interest in subsidiary            |   |       | 100,000   |   |         |   | 100,000  |         |   |   |   |   |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  Net cash provided by financing activities                      |   |       | 499,179   |   |         |   | 100,000  |         |   |   | - |   |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  NET INCREASE (DECREASE) IN CASH                                |   |       | 105,216   |   |         |   | 68,486   |         |   |   | (44,576 | ) |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  Cash, beginning of period                                      |   |       | -         |   |         |   | 36,730   |         |   |   | 85,122 |   |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  CASH, END OF PERIOD                                            |   |       | 105,216   |   |         |   | 105,216  |         |   |   | 40,546 |   |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  INCOME TAXES PAID                                              |   |       | -         |   |         |   | -        |         |   |   | - |   |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  INTEREST PAID                                                  |   |       | 3,226     |   |         |   | -        |         |   |   | - |   |
|                                                                 |   |       |      |   |         |   |     |         |   |   |   |   |
|  NON-CASH TRANSACTIONS - PURCHASE OF SWEG TECHNOLOGY FOR SHARES |   |       | 1,855,605 |   |         |   | -        |         |   |   | - |   |
|  PURCHASE OF SWEG TECHNOLOGY BY SUBSIDIARY FOR NOTE PAYABLE     |   |       | 600,000   |   |         |   | 600,000  |         |   |   | - |   |

----

| FIRST NATIONAL ENERGY CORPORATION                                                     |   |
|---------------------------------------------------------------------------------------|--------|
| (Formerly First National Power Corporation)                                           |   |
| (A Development Stage Company)                                                         |   |
| Consolidated Interim Statements of Changes in Stockholders’ Equity (Deficiency) |   |
| From Inception until September 30, 2010                                               |   |
| (Amounts expressed in US Dollars)                                                     |   |

|                                    |   | Common stock - dollar amountat par value |   |   | Common stock - number ofshares |   |      | Commonstocksubscribed |   |   | Additionalpaid-in capital (discount) |   |   | Deficitaccumulatedduring the developmentstage |   |   | Total FNEC shareholders'equity |   |    | Non-controlling interests |   |   | Total equity |   |
|-----------------------------------------|--------|------------------------------------------|--------|--------|--------------------------------|--------|-----------|-----------------------|--------|--------|--------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------|--------|---------|---------------------------|--------|--------|--------------|--------|
|                                    |
|                                    |
|                                    |
|                                    |
|                                    |   | $                                        |   |   |                           |   |      |                  | $      |   |                                 | $      |   |                                          | $      |   |                                | $      |    |                      | $      |   |         | $      |   |
|  Balance at November 16, 2000      |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          |   |   |                                |   |    |                      |   |   |         |   |   |   |   |   |   |   |   |
|  Issuance of common stock for cash |   |                                     | 100    |   |                           |   | 100,000   |                  |   |   |                                 |   |   |                                          | 900    |   |                                |   |    |                      |   |   | 1,000        |   |   |   |   |   |   |   | 1,000 |   |
|  Net Loss for the Period           |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          |   |   |                                |   | (968    | )                         |   |   | (968         | )      |   |   |   |   |   |   | (968 | ) |
|                                    |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          |   |   |                                |   |    |                      |   |   |         |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2000   |   |                                     | 100    |   |                           |   | 100,000   |                  |   |   | -                                    |   |   |                                          | 900    |   |                                |   | (968    | )                         |   |   | 32           |   |   |   | - |   |   |   | 32 |   |
|  Issuance of stock for cash        |   |                                     | 400    |   |                           |   | 400,000   |                  |   |   |                                 |   |   |                                          | 3,600  |   |                                |   |    |                      |   |   | 4,000        |   |   |   |   |   |   |   | 4,000 |   |
|  Issuance of stock for cash        |   |                                     | 700    |   |                           |   | 700,000   |                  |   |   |                                 |   |   |                                          | 6,300  |   |                                |   |    |                      |   |   | 7,000        |   |   |   |   |   |   |   | 7,000 |   |
|  Issuance of stock for cash        |   |                                     | 850    |   |                           |   | 850,000   |                  |   |   |                                 |   |   |                                          | 7,650  |   |                                |   |    |                      |   |   | 8,500        |   |   |   |   |   |   |   | 8,500 |   |
|  Currency Translation              |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          | 100    |   |                                |   |    |                      |   |   | 100          |   |   |   |   |   |   |   | 100 |   |
|  Net Loss for the Year             |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          |   |   |                                |   | (23,954 | )                         |   |   | (23,954      | )      |   |   |   |   |   |   | (23,954 | ) |
|                                    |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          |   |   |                                |   |    |                      |   |   |         |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2001   |   |                                     | 2,050  |   |                           |   | 2,050,000 |                  |   |   | -                                    |   |   |                                          | 18,550 |   |                                |   | (24,922 | )                         |   |   | (4,322       | )      |   |   | - |   |   |   | (4,322 | ) |
|  Expiration of recission offer for |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          |   |   |                                |   |    |                      |   |   |         |   |   |   |   |   |   |   |   |   |
|    sale of stock         |   |                                     | 64     |   |                           |   | 63,536    |                  |   |   |                                 |   |   |                                          | 6,290  |   |                                |   |    |                      |   |   | 6,354        |   |   |   |   |   |   |   | 6,354 |   |
|  Net Loss for the Year             |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          |   |   |                                |   | (26,047 | )                         |   |   | (26,047      | )      |   |   |   |   |   |   | (26,047 | ) |
|                                    |   |                                     |   |   |                           |   |      |                  |   |   |                                 |   |   |                                          |   |   |                                |   |    |                      |   |   |         |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2002   |   |                                     | 2,114  |   |                           |   | 2,113,536 |                  |   |   | -                                    |   |   |                                          | 24,840 |   |                                |   | (50,969 | )                         |   |   | (24,015      | )      |   |   | - |   |   |   | (24,015 | ) |

----

| FIRST NATIONAL ENERGY CORPORATION                                                     |   |
|---------------------------------------------------------------------------------------|--------|
| (Formerly First National Power Corporation)                                           |   |
| (A Development Stage Company)                                                         |   |
| Consolidated Interim Statements of Changes in Stockholders’ Equity (Deficiency) |   |
| From Inception until September 30, 2010                                               |   |
| (Amounts expressed in US Dollars)                                                     |   |

|                                      |   | Common stock - dollar amountat par value |   |   | Common stock - number ofshares |   |       | Commonstocksubscribed |   |   | Additionalpaid-in capital (discount) |   |   | Deficitaccumulatedduring the developmentstage |    |   | Total FNEC shareholders'equity |   |     |   |   |   |     |   |   |   |
|-------------------------------------------|--------|------------------------------------------|--------|--------|--------------------------------|--------|------------|-----------------------|--------|--------|--------------------------------------|--------|--------|-----------------------------------------------|---------|--------|-------------------------------------|--------|----------|--------|--------|--------|----------|--------|--------|--------|
|                                      |   | Non-controlling interests                |   |   | Total equity                   |   |
|                                      |
|                                      |
|                                      |
|                                      |   | $                                        |   |   |                           |   |       | $                     |   |   | $                                    |   |   | $                                             |    |   | $                                   |   |     | $      |   |   | $        |   |
|  Stock split 5:1                     |   |                                     | 8,454  |   |                           |   | 8,454,144  |                  |   |   |                                 |   |   |                                          | (8,454  | )      |                                |   |     |   |   |   | -        |   |   |   |   |   |   |   |   |   |
|  Shares issued for services rendered |   |                                     | 200    |   |                           |   | 200,000    |                  |   |   |                                 |   |   |                                          | 79,800  |   |                                |   |     |   |   |   | 80,000   |   |   |   |   |   |   |   | 80,000 |   |
|  Net Loss for the Year               |   |                                     |   |   |                           |   |       |                  |   |   |                                 |   |   |                                          |    |   |                                |   | (107,245 | )      |   |   | (107,245 | )      |   |   |   |   |   |   | (107,245 | ) |
|                                      |   |                                     |   |   |                           |   |       |                  |   |   |                                 |   |   |                                          |    |   |                                |   |     |   |   |   |     |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2003     |   |                                     | 10,768 |   |                           |   | 10,767,680 |                  |   |   | -                                    |   |   |                                          | 96,186  |   |                                |   | (158,214 | )      |   |   | (51,260  | )      |   |   | - |   |   |   | (51,260 | ) |
|  Stock split 7:1                     |   |                                     | 64,606 |   |                           |   | 64,606,080 |                  |   |   |                                 |   |   |                                          | (64,606 | )      |                                |   |     |   |   |   | -        |   |   |   |   |   |   |   | - |   |
|  Shares issued for services rendered |   |                                     | 30     |   |                           |   | 30,000     |                  |   |   |                                 |   |   |                                          | 15,870  |   |                                |   |     |   |   |   | 15,900   |   |   |   |   |   |   |   | 15,900 |   |
|  Shares subscribed                   |   |                                     |   |   |                           |   |       |                  |   |   | 146                                  |   |   |                                          | 70,371  |   |                                |   |     |   |   |   | 70,517   |   |   |   |   |   |   |   | 70,517 |   |
|  Shares issued for services rendered |   |                                     | 44     |   |                           |   | 43,000     |                  |   |   |                                 |   |   |                                          | 9,956   |   |                                |   |     |   |   |   | 10,000   |   |   |   |   |   |   |   | 10,000 |   |
|  Net Loss for the Year               |   |                                     |   |   |                           |   |       |                  |   |   |                                 |   |   |                                          |    |   |                                |   | (75,414  | )      |   |   | (75,414  | )      |   |   |   |   |   |   | (75,414 | ) |
|                                      |   |                                     |   |   |                           |   |       |                  |   |   |                                 |   |   |                                          |    |   |                                |   |     |   |   |   |     |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2004     |   |                                     | 75,448 |   |                           |   | 75,446,760 |                  |   |   | 146                                  |   |   |                                          | 127,777 |   |                                |   | (233,628 | )      |   |   | (30,257  | )      |   |   | - |   |   |   | (30,257 | ) |
|  Shares issued for services rendered |   |                                     | 830    |   |                           |   | 830,000    |                  |   |   |                                 |   |   |                                          | 193,160 |   |                                |   |     |   |   |   | 193,990  |   |   |   |   |   |   |   | 193,990 |   |
|  Net Loss for the Year               |   |                                     |   |   |                           |   |       |                  |   |   |                                 |   |   |                                          |    |   |                                |   | (208,886 | )      |   |   | (208,886 | )      |   |   |   |   |   |   | (208,886 | ) |
|                                      |   |                                     |   |   |                           |   |       |                  |   |   |                                 |   |   |                                          |    |   |                                |   |     |   |   |   |     |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2005     |   |                                     | 76,278 |   |                           |   | 76,276,760 |                  |   |   | 146                                  |   |   |                                          | 320,937 |   |                                |   | (442,514 | )      |   |   | (45,153  | )      |   |   | - |   |   |   | (45,153 | ) |
|  Net Loss for the Year               |   |                                     |   |   |                           |   |       |                  |   |   |                                 |   |   |                                          |    |   |                                |   | (32,962  | )      |   |   | (32,962  | )      |   |   |   |   |   |   | (32,962 | ) |
|                                      |   |                                     |   |   |                           |   |       |                  |   |   |                                 |   |   |                                          |    |   |                                |   |     |   |   |   |     |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2006     |   |                                     | 76,278 |   |                           |   | 76,276,760 |                  |   |   | 146                                  |   |   |                                          | 320,937 |   |                                |   | (475,476 | )      |   |   | (78,115  | )      |   |   | - |   |   |   | (78,115 | ) |

----

| FIRST NATIONAL ENERGY CORPORATION                                                     |   |
|---------------------------------------------------------------------------------------|--------|
| (Formerly First National Power Corporation)                                           |   |
| (A Development Stage Company)                                                         |   |
| Consolidated Interim Statements of Changes in Stockholders’ Equity (Deficiency) |   |
| From Inception until September 30, 2010                                               |   |
| (Amounts expressed in US Dollars)                                                     |   |

|                                          |   | Common stock - dollar amountat par value |    |   | Common stock - number ofshares |   |        | Commonstocksubscribed |   |   | Additionalpaid-in capital (discount) |   |   | Deficitaccumulatedduring the developmentstage |      |   | Total FNEC shareholders'equity |   |     |   |   |   |      |   |   |   |
|-----------------------------------------------|--------|------------------------------------------|---------|--------|--------------------------------|--------|-------------|-----------------------|--------|--------|--------------------------------------|--------|--------|-----------------------------------------------|-----------|--------|-------------------------------------|--------|----------|--------|--------|--------|-----------|--------|--------|--------|
|                                          |   | Non-controlling interests                |    |   | Total equity                   |   |
|                                          |
|                                          |
|                                          |
|                                          |   | $                                        |    |   |                           |   |        |                  | $      |   |                                 | $      |   |                                          | $         |   |                                | $      |     |   | $      |   |      | $      |   |
|  Net Loss for the Year                   |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   | (30,760  | )      |   |   | (30,760   | )      |   |   |   |   |   |   | (30,760 | ) |
|  Issue shares bought under subscription  |   |                                     | 146     |   |                           |   | 146,000     |                  |   |   | (146                                 | )      |   |                                          |      |   |                                |   |     |   |   |   | -         |   |   |   |   |   |   |   | - |   |
|                                          |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2007         |   |                                     | 76,424  |   |                           |   | 76,422,760  |                  |   |   | -                                    |   |   |                                          | 320,937   |   |                                |   | (506,236 | )      |   |   | (108,875  | )      |   |   | - |   |   |   | (108,875 | ) |
|  Shares issued for services rendered     |   |                                     | 100     |   |                           |   | 100,000     |                  |   |   |                                 |   |   |                                          | 400       |   |                                |   |     |   |   |   | 500       |   |   |   |   |   |   |   | 500 |   |
|  Net Loss for the period                 |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   | (78,645  | )      |   |   | (78,645   | )      |   |   |   |   |   |   | (78,645 | ) |
|                                          |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2008         |   |                                     | 76,524  |   |                           |   | 76,522,760  |                  |   |   | -                                    |   |   |                                          | 321,337   |   |                                |   | (584,881 | )      |   |   | (187,020  | )      |   |   | - |   |   |   | (187,020 | ) |
|  Reverse Stock split 1:100               |   |                                     | (75,759 | )      |                           |   | (75,757,532 | )                     |   |   |                                 |   |   |                                          | 75,759    |   |                                |   |     |   |   |   | -         |   |   |   |   |   |   |   | - |   |
|  Shares issued for services rendered     |   |                                     | 100     |   |                           |   | 100,000     |                  |   |   |                                 |   |   |                                          | 31,900    |   |                                |   |     |   |   |   | 32,000    |   |   |   |   |   |   |   | 32,000 |   |
|  Purchase of SWEG license for shares     |   |                                     | 98,800  |   |                           |   | 98,800,000  |                  |   |   |                                 |   |   |                                          | 1,756,805 |   |                                |   |     |   |   |   | 1,855,605 |   |   |   |   |   |   |   | 1,855,605 |   |
|  Net Loss for the Year                   |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   | (210,769 | )      |   |   | (210,769  | )      |   |   |   |   |   |   | (210,769 | ) |
|                                          |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
|  Balance as of December 31, 2009         |   |                                     | 99,665  |   |                           |   | 99,665,228  |                  |   |   | -                                    |   |   |                                          | 2,185,801 |   |                                |   | (795,650 | )      |   |   | 1,489,816 |   |   |   | - |   |   |   | 1,489,816 |   |
|  Net Loss for the Year                   |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   | (194,354 | )      |   |   | (194,354  | )      |   |   | (30 | ) |   |   | (194,384 | ) |
|  Sale of minority interest in subsidiary |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          | 99,900    |   |                                |   |     |   |   |   | 99,900    |   |   |   | 100 |   |   |   | 100,000 |   |
|  Non-controlling minority interest       |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
|                                          |   |                                     |    |   |                           |   |        |                  |   |   |                                 |   |   |                                          |      |   |                                |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
|  Balance as of September 30, 2010        |   |                                     | 99,665  |   |                           |   | 99,665,228  |                  |   |   | -                                    |   |   |                                          | 2,285,701 |   |                                |   | (990,004 | )      |   |   | 1,395,362 |   |   |   | 70 |   |   |   | 1,395,432 |   |

----

----

| a)   | Description of the Business |
|----------------|-----------------------------|

| b)   | Purchase of Technology License |
|----------------|--------------------------------|

----

----

| c)   | Further Purchase of Technology License |
|----------------|----------------------------------------|

----

----

|                              |   | 2010 |      |   | 2009                     |   |
|-----------------------------------|--------|------|-----------|--------|--------------------------|--------|
|                              |   | Cost |      |   | Accumulated Amortization |   |   | Net Book Value |   |   | Net BookValue |   |
| North American Technology License |   | $    | 1,855,605 |   |                     | $      | 268,808 |   |   | $ | 1,586,797 |   |   | $ | 1,725,967 |   |
| Indian Technology License         |   | $    | 600,000   |   |                     | $      | 30,000 |   |   | $ | 570,000 |   |   | $ | - |   |
|                              |   | $    | 2,455,605 |   |                     | $      | 298,808 |   |   | $ | 2,156,797 |   |   | $ | 1,725,967 |   |

|   | 2010   | *      |   | $      | 61,390    |  * For the 4th Quarter of 2010 |
|--------|--------|--------|--------|--------|-----------|-------------------------------------|
|   | 2011   |   |   |   | 245,561   |                                |
|   | 2012   |   |   |   | 245,561   |                                |
|   | 2013   |   |   |   | 245,561   |                                |
|   | 2014   |   |   |   | 245,561   |                                |
|   |   |   |   | $      | 1,043,634 |                                |

----

----

----

----

----

|   | 2010   | *      |   | $      | 61,390    | * For the 4th quarter of 2010 |
|--------|--------|--------|--------|--------|-----------|-------------------------------|
|   | 2011   |   |   |   | 245,561   |                          |
|   | 2012   |   |   |   | 245,561   |                          |
|   | 2013   |   |   |   | 245,561   |                          |
|   | 2014   |   |   |   | 245,561   |                          |
|   |   |   |   | $      | 1,043,634 |                          |

----

----

| Exhibit No. |   | Document                                                                                                                                                                                                       |
|-------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31*         |   | Sect. 302 Certification Statement of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                         |
| 32*         |   | Sect. 906 Certification Statement of the Principal Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002 |

----

----

|                          |                              |   |
|-------------------------------|-----------------------------------|--------|
|                          | FIRST NATIONAL ENERGY CORPORATION |   |
|                          |                              |   |
| Dated: October 25, 2010  | /s/ Gregory Sheller          |   |
|                          | Gregory Sheller,                  |   |
|                          | Chief Executive Officer           |   |
|                          |                              |   |