UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~September~~March 3031, ~~2016~~2017

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

For the transition period from ____________ to ________________.

Commission File Number: ~~333~~001-~~62588~~37696

FIRST NATIONAL ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Nevada

66-0349372

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

44 Greystone Crescent, Georgetown, Ontario Canada L7G 1G9

(Address of principal executive offices) (Zip Code)

(416) 918-6987

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No

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

[X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See ~~the~~ definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-~~accelerated~~Accelerated filer [ ] Smaller reporting company [X] Emerging growth company [ ] (doDo not check if a smaller reporting company) ~~Smaller reporting company [X]~~

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

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

Yes [ ] No [X]

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

As of ~~September~~June 3020, ~~2016~~2017, there were 99,~~865~~915,228 common shares issued and outstanding.

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

First National Energy Corporation

Interim Consolidated Financial Statements

~~September~~March 3031, ~~2016~~2017

(Amounts expressed in US Dollars)

(unaudited)

Index

	Page
Interim Consolidated Balance Sheets as at March 31, 2017 (unaudited) and December 31, 2016 (audited)	2
Interim Consolidated Balance Sheets as at September 30, 2016 (unaudited) and December 31, 2015	1
Interim Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2017 (unaudited) and March 31, 2016 (unaudited)	3
Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the nine months and three months ended September 30, 2016 (unaudited) and September 30, 2015 (unaudited)	2
Interim Consolidated Statements of Stockholders’ Deficiency for the three months ended March 31, 2017 (unaudited) and year ended December 31, 2016 (audited)	4
Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 (unaudited) and September 30, 2015 (unaudited)	3
Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2017 (unaudited) and March 31, 2016 (unaudited)	5
Interim Consolidated Statements of Stockholders’ Deficiency for the nine months ended September 30, 2016 (unaudited) and year ended December 31, 2015	4
Condensed notes to Interim Consolidated Financial Statements	6 - 11
Condensed notes to Interim (unaudited) Consolidated Financial Statements	5-11

FIRST NATIONAL ENERGY CORPORATION

Interim Consolidated Balance Sheets

As of September 30, 2016 and December 31, 2015

(Amounts expressed in US Dollars)

	September 30, 2016			December 31, 2015
	(unaudited)			(audited)
	$			$
ASSETS
CURRENT ASSETS
Cash		1,059			1,937
Total Current Assets		1,059			1,937
LICENSES FOR TECHNOLOGY (Note 4)		200			200
INTANGIBLE ASSET (Note 5)		1			-
Total Assets		1,260			2,137
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities		21,269			47,853
Loan payable to director (Note 7)		119,917			110,234
Loan payable to Boreas Research Corporation (Note 6)		540,000			540,000
		681,186			698,087
Going Concern (Note 2)
Related Party Transactions (Note 7)
Commitment (Note 10)
STOCKHOLDERS’ DEFICIENCY
Capital Stock ($.001 par value, 300,000,000 common shares authorized, 99,865,228 issued and outstanding as of September 30, 2016 and December 31, 2015		99,765			99,765
Additional paid-in Capital		103,329			103,329
Accumulated other comprehensive loss		(10	)		(10	)
Deficit Accumulated during the development stage		(883,063	)		(899,087	)
Non-controlling interest		53			53
Total FNEC Stockholders’ Deficit		(679,926	)		(695,950	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY		1,260			2,137

The accompanying notes form an integral part of these Interim Consolidated Financial Statements.

Page 1

FIRST NATIONAL ENERGY CORPORATION

~~Interim~~ Consolidated Balance ~~Statements of Operations and Comprehensive Income (Loss)~~Sheets

~~For~~As ~~the~~of ~~nine~~March ~~months~~31, 2017 and ~~three~~December ~~months~~31, ~~ended~~2016

(Amounts ~~expressed~~Expressed in US Dollars)

	9 Months Ended September 30						3 Months Ended September 30
	2017			2016
	2016			2015			2016		2015
	$			$
	(unaudited)			(~~unaudited~~audited)			~~(unaudited)~~		~~(unaudited)~~
	$			$			$		$
ASSETS
REVENUE		-			-			-		-
CURRENT
EXPENSES
Cash		1,059			1,059
General and administrative expenses		(16,024	)		-			-		-
Total Current Assets		1,059			1,059
TOTAL OPERATING EXPENSES		(16,024	)		-			-		-
LICENSES FOR TECHNOLOGY (Note 4)		200			200
INCOME (LOSS) BEFORE INCOME TAX		16,024			-			-		-
Total assets		1,259			1,259
Income taxes		-			-			-		-
LIABILITIES
NET INCOME (LOSS)		16,025			-			-		-
CURRENT
Net income (loss) attributable to non-controlling interest		-			-			-		-
Accounts payable and accrued liabilities		29,945			44,456
Net income (loss) attributable to FNEC Stockholders		16,024			-			-		-
Loan payable to director (note 7)		142,400			125,117
Earnings per share, basic and diluted	$	0.00		$	-		$	-	$	-
Loan payable (note 6)		-			540,000
Weighted average common shares outstanding		99,865,228			99,865,228			99,865,228		99,865,228
Loan payable to related party (note 6)		540,000			-
COMPREHENSIVE INCOME (LOSS)
Total current liabilities		712,345			709,573
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST		16,024			-			-		-
Going Concern (Note 2)
Foreign exchange translation adjustment for the period		-			-			-		-
Related Party Transactions (Note7)
Other Comprehensive Income (Loss)		16,024			-			-		-
Commitment and Contingencies (Note 10)
Comprehensive Income (Loss) attributable to non-controlling interest		-			-			-		-
STOCKHOLDERS’ DEFICIENCY
Comprehensive Income (Loss) attributable to FNEC Stockholders		16,024			-			-		-
Capital Stock (note 8)		99,815			99,765
Additional paid-in Capital		119,779			103,329
Accumulated Deficit		(930,723	)		(911,451	)
Accumulated Other Comprehensive Loss		(10	)		(10	)
Total Stockholders’ Deficiency Attributable to the Company’s Stockholders		(731,139	)		(708,367	)
Non-controlling interest		53			53
Total Stockholders’ Deficiency		(711,086	)		(708,314	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY		1,259			1,259

The accompanying notes form an integral part ofto these ~~Interim~~consolidated ~~Consolidated~~interim ~~Financial~~financial ~~Statements.~~ statements

Page 2

FIRST NATIONAL ENERGY CORPORATION

~~Interim~~ Consolidated Statements of ~~Cash~~Operations ~~Flows~~and Other Comprehensive Loss

For the ~~nine~~3 months ended March 31,

(Amounts ~~expressed~~Expressed in US Dollars)

	September 30, 2016			September 30, 2015
	2017			2016
	(unaudited)			(unaudited)
	$			$
CASH FLOWS FROM OPERATING ACTIVITIES
	(unaudited)			(unaudited)
Net income		16,024			-
REVENUE		-			-
Adjustments for items not affecting cash
EXPENSES
Decrease in accounts payable and accrued liabilities		(26,584	)		-
General and administrative		19,272			12,392
Net cash used in operating activities		(10,560	)		-
TOTAL OPERATING EXPENSES		19,272			12,392
CASH FLOWS FROM FINANCING ACTIVITIES
LOSS BEFORE INCOME TAXES		(19,272	)		(12,392	)
Loan from Director		9,683			-
Income taxes		-			-
Purchase of Intangible (Note 5)		(1	)		-
NET LOSS		(19,272	)		(12,392	)
Net cash provided by financing activities		9,682			-
Net loss and comprehensive loss attributable to the Company’s stockholders		(19,272	)		(12,392	)
NET INCREASE (DECREASE) IN CASH		(878	)		-
Net loss and comprehensive loss attributable to non-controlling interest		-			-
Cash, beginning of period		1,937			2,237
NET LOSS AND COMPREHENSIVE LOSS		(19,272	)		(12,392	)
CASH, END OF PERIOD		1,059			2,237
Net loss per share - basic and diluted	$	0.00		$	0.00
SUPPLEMENTARY DISCLOSURE
Weighted average common shares outstanding		99,900,942			99,865,228
INCOME TAXES PAID		-			-
INTEREST PAID		-			-

The accompanying notes form an integral part ofto these ~~Interim~~consolidated ~~Consolidated~~interim ~~Financial~~financial ~~Statements.~~ statements

Page 3

FIRST NATIONAL ENERGY CORPORATION

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

For the ~~nine~~years ~~months~~ ended ~~September~~December 3031, 2016 and ~~the~~3 ~~year~~months ended ~~December~~March 31, ~~2015~~2017

(Amounts ~~expressed~~Expressed in US Dollars)

	Common stock - number of shares		Common stock - dollar amount at par value		Additional paid-in capital		Accumulated Deficit			Accumulated other comprehensive loss			Non- controlling interests			Total stockholders’ deficit
	Number of Common Shares		Common Shares Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Stockholders’ Deficiency
			$		$		$			$			$			$
Balance as of December 31, 2014 (audited)		99,865,228		99,765		103,329		(876,475	)		(10	)		53			(673,338	)
Balance as of December 31, 2014		99,865,228		99,765		103,329		(876,475	)		(10	)		58			(673,338	)
Net Loss for the year		-		-		-		(22,612	)		-			-			(22,612	)
Net loss for the year		-		-		-		(22,612	)		-			(5	)		(22,612	)
Balance as of December 31, 2015 (audited)		99,865,228		99,765		103,329		(899,087	)		(10	)		53			(695,950	)
Balance as of December 31, 2015		99,865,228		99,765		103,329		(899,087	)		(10	)		53			(695,950	)
Net Income for the Period		-		-		-		16,024			-			-			16,024
Net loss for the year		-		-		-		(12,364	)		-			-			(12,364	)
Balance as of September 30, 2016 (unaudited)		99,865,228		99,765		103,329		(883,063	)		(10	)		53			(679,926	)
Balance as of December 31, 2016 (audited)		99,865,228		99,765		103,329		(911,451	)		(10	)		53			(708,314	)
Sales of 50,000 shares of common stock		50,000		50		16,450		-			-			-			16,500
Net loss for the year		-		-		-		(19,272	)		-			-			(19,272	)
Balance as of March 31, 2017 (unaudited)		99,915,228		99,815		119,779		(930,723	)		(10	)		53			(711,086	)

The accompanying notes form an integral part ofto these ~~Interim~~consolidated ~~Consolidated~~interim ~~Financial~~financial ~~Statements.~~ statements

Page 4

~~First~~FIRST ~~National~~NATIONAL ~~Energy~~ENERGY ~~Corporation~~ CORPORATION

~~Condensed~~Consolidated ~~Notes~~Statements toof ~~the~~Cash ~~Interim Unaudited Consolidated Financial Statements~~ Flows

~~September~~For ~~30,~~the ~~2016~~3 months ended December 31,

(Amounts ~~expressed~~Expressed in US Dollars)

	2017			2016
	$			$
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		(19,272	)		(12,392	)
Decrease in accounts payable and accrued liabilities		(14,511	)		(6,731	)

Net cash used in operating activities		(33,783	)		(19,123	)
CASH FLOWS FROM FINANCING ACTIVITIES

Increase in loan from director		17,283			18,473
Issuance of shares, net of financing expenses		16,500			-

Net cash provided by financing activities		33,783			18,473

NET DECREASE IN CASH		-			(650	)
Cash, beginning of period		1,059			1,937

CASH, END OF PERIOD		1,059			1,287

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

Page 5

1. NATURE OF OPERATIONS AND PURCHASE OF TECHNOLOGY

a) Nature of ~~the Business~~operations

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

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

b) Purchase of Technology License

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

The preliminary letter of intent was ~~disclosed~~reported by the Company on ~~Form~~form 8-K to the Securities and Exchange Commission (“SEC”) on April 21, 2009, and the Agreement was annexed to an information statement on ~~Form~~form 14-C filed with the SEC in preliminary and definitive forms on April 22, 2009 and May 4, 2009, respectively. The definitive information statement was mailed to the Stockholders of the Company on May 4, 2009. ~~The Company obtained written consent to the Agreement and the transaction from the holders of 55.82% of its issued and outstanding shares of common stock in lieu of a meeting of stockholders.~~

OnThe ~~May 14, 2009, the~~ Company ~~and~~obtained ~~Boreas~~written ~~amended~~consent ~~the Agreement by making and entering into a First Amendment of Technology License and Stock Purchase Agreement (the “Amendment”), pursuant~~ to ~~which (1) Boreas elected, as authorized by~~ the Agreement~~, to~~ ~~cause the restricted~~ and ~~unregistered common shares of~~ the ~~Company~~transaction ~~due~~from ~~to Boreas at~~ the ~~Closing~~holders toof be55.82% ~~issued to the stockholders~~ of ~~Boreas,~~its ~~and~~issued ~~(2) the Company~~ and ~~Boreas~~outstanding shares ~~agreed to reduce the number~~ of ~~restricted~~common ~~and~~stock ~~unregistered~~in ~~common~~lieu ~~shares~~ of ~~the~~a ~~Company to~~meeting ~~be issued at the closing~~ of ~~the transaction, from 98,915,000 shares to 98,800,000 shares~~stockholders.

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

Page 5

First National Energy Corporation

Condensed Notes to the Interim Unaudited Consolidated Financial Statements

September 30, 2016

(Amounts expressed in US Dollars)

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

Page 6

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

b) Purchase of Technology License (cont’d)

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

On April 18, 2011, First National Energy Corporation (the “Company”) entered into a Novation Agreement (the “Novation”) with all of the stockholders of Boreas, revising the structure of the May 25, 2009 transaction by which the Company acquired a territorial license to certain rights in alternative energy technology of Boreas, in exchange for a quantity of newly issued common shares of the Company. The Novation amended the Technology License and Stock Purchase Agreement (the “Original Agreement”) to substitute the stockholders of Boreas as the licensor under the Original Agreement.

~~Accordingly,~~c) asFurther ofPurchase ~~September 30, 2016, the Boreas stockholders own 98.893%~~ of ~~the~~Technology ~~Company’s 99,865,228 outstanding shares.~~License

cOn March 22, 2010, Pavana Power Corporation (“Pavana”), a Nevada corporation, the Company’s 99.9% owned subsidiary, ~~Further~~acquired ~~Purchase~~an exclusive, territorial, 25-year license for the Republic of ~~Technology~~India ~~License~~(“India”), from ~~Pavana~~Boreas, pursuant to which the Company’s subsidiary acquired technology rights for India in the technology of Boreas that maximizes the energy productivity of existing wind turbines by capturing energy that flows through and underneath existing wind turbine systems. The consideration due from the Company’s subsidiary to Boreas for the license is a deferred cash payment of $600,000, and a future royalty equal to 5% of the subsidiary’s “EBITDA” (earnings before interest, taxes, depreciation and amortization) from exploitation of the acquired license.

On March 22, 2010, Pavana Power Corporation (“Pavana”), a Nevada corporation, the Company’s 99.9% owned subsidiary, acquired an exclusive territorial 25 year license for the Republic of India (“India”), from Boreas, pursuant to which the Company’s subsidiary acquired technology rights for India in the technology of Boreas that maximizes the energy productivity of existing wind turbines by capturing energy that flows through and underneath existing wind turbine systems. The consideration due from the Company’s subsidiary to Boreas for the license is a deferred cash payment of $600,000, and a future royalty equal to 5% of the subsidiary’s “EBITDA” (earnings before interest, taxes, depreciation and amortization) from exploitation of the acquired license.

The transaction between related corporations was valued at the amount of the monetary consideration that was provided to Boreas.

2. GOING CONCERN

The Company’s ~~unaudited interim~~ consolidated financial statements are prepared using accounting principles generally accepted in the United States of America and applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not generated any revenues from its planned principal operations through ~~September 30~~December 31, 2016 and has recorded losses since inception, has negative working capital, has yet to achieve profitable operations and expects further losses in the development of its business. There can be no assurance that the Company will have adequate capital resources to fund planned operations or that any additional funds will be available to the Company when needed, or if available, will be available on favorable terms in the amounts required by the Company. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ~~interim~~ consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Page~~Management has 6plans to raise cash through debt offerings once the sales of the technologies begin. The facilities and equipment required for successfully completing the business model have been identified but until the resources are available, have not been acquired or engaged. In the period prior to the onset of operations, the Company will undertake to raise further cash through further capital offerings. There is no assurance that the Company will be successful in raising additional capital.

~~First National~~Page ~~Energy Corporation~~ 7

Condensed Notes to the Interim Unaudited Consolidated Financial Statements

September 30, 2016

(Amounts expressed in US Dollars)

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

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Presentation and Consolidation

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

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

The unaudited interim consolidated financial statements should be read in conjunction with the financial statements and Notes thereto together with management’s discussion and analysis of financial condition and results of operations contained in the Company’s annual report on Form 10-K for the year ended December 31, ~~2015~~2016. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature considered necessary to fairly state the financial position of the Company at ~~September~~March 3031, ~~2016~~2017, the results of its operations for the three months ended ~~September~~March 3031, ~~2016~~ ~~and~~2017 ~~2015~~and 2016, and its cash flows for the three months ended ~~September~~March 3031, ~~2016~~2017 and ~~2015~~2016. In addition, some of the Company’s ~~statements~~ statements in its quarterly report on Form 10-Q may be considered forward-looking and involve risks and uncertainties that could ~~significantly~~ significantly impact expected results. The results of operations for the three months ended ~~September~~March 3031, ~~2016~~2017 are not necessarily indicative of results to be expected for the full year.

b) 2016 Omnibus Equity Compensation Plan

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

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

Page 7

First National Energy Corporation

Condensed Notes to the Interim Unaudited Consolidated Financial Statements

September 30, 2016

(Amounts expressed in US Dollars)

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

As of ~~September~~March 3031, ~~2016~~2017, there was $nil of recognized expense related to non-vested stock-based compensation arrangements granted.

4. LICENSES FOR TECHNOLOGY

	2016						2015
	2017				2016
	Cost		~~Accumulated~~Net ~~Amortization~~Book Value		Net Book Value		~~Net Book Value~~
North American Technology License	$	100	$	-100	$	100	$	~~100~~
Indian Technology License	$	100	$	-100	$	100	$	~~100~~
	$	200	$	-	$	200	$	200
Total	$	200	$	200	$	200

Page 8

5. INTANGIBLE ASSET

Effective February 165, 2016, the Company acquired VAWT/VRTB/Bolotov Rotor wind turbine technology (“Technology”) from Bolotov and affiliates (“Serge Bolotov”). The technical and intellectual property were designed, patented, developed and manufactured by Serge Bolotov.

The Company valued this technology under the guidance of ASC 350., ~~The~~Intangibles-Goodwill ~~purchase~~and ~~consideration~~Other iswhich ~~based~~states onthat ~~the~~an ~~future~~intangible asset ~~economic~~that ~~viability of~~is ~~this~~acquired ~~intellectual~~either ~~property~~individually ~~which~~or onwith ~~the~~a ~~date~~group of ~~acquisition~~other ~~cannot~~assets shall be initially measured ~~reliably.~~based Inon ~~accordance~~its ~~with~~fair ~~ASC 350, because~~value. As there ~~are~~is no ~~upfront~~active market and the future cash ~~consideration~~flows ~~for~~and economic viability of this intellectual property, ~~hence~~are ~~the~~uncertain ~~Company~~and cannot ~~has~~be ~~recorded~~measured ~~the~~reliably, ~~technology~~no atvalue awas ~~nominal value~~assigned ofto $1the technology.

The future compensation to Serge Bolotov consists of;:

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

In the event the Company or a related or assigned party does not use the assets transferred in the transaction within a period of 3 years from ~~either~~ the date the memorandum isof understanding was accepted as a final agreement oron ~~the~~February ~~date~~5th, ~~of a Definitive Agreement~~2016, ~~the Bolotov~~Serge Bolotov will have the right, but not the obligation, to purchase all unused assets, following ten ~~(10)~~ days written notice to the Company or a related or assigned party for the amount of US $5,000.

6. LOAN PAYABLE TO RELATED PARTY

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

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

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

Condensed Notes to the Interim Unaudited Consolidated Financial Statements

September 30, 2016

(Amounts expressed in US Dollars)

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

7. RELATED PARTY TRANSACTIONS

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

In 2010, the Company’s majority owned subsidiary Pavana Power Corporation, purchased the Indian license to the SWEG technology from Boreas, which is related by virtue of common control. (See note 1 (c)).

A director of the Company has advanced monies to the Company to pay certain expenses. The advances are non-interest bearing and are due on demand. The amount owing to the director was $119,917 ($110,234 – 2015).

8. SEGMENTED INFORMATION

The Company, after reviewing its operating systems, has determined that it has one reportable segment and geographic segment. The Company’s operations are all related to the provision of wind-driven solutions for power generation. All assets of the business are located in the United States of America.

9. FAIR VALUE MEASUREMENTS

The Company follows ASC 820-10, “Fair Value Measurements and Disclosures” (ASC 820-10), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

● Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Fair valued assets that are generally included in this category are cash and cash equivalents comprised of money market funds, restricted cash and short-term investments.

● Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Page 9

~~First~~7 ~~National~~LOAN ~~Energy~~PAYABLE ~~Corporation~~TO DIRECTOR AND RELATED PARTY TRANSACTIONS

~~Condensed~~Transactions ~~Notes~~with torelated parties are incurred in the ~~Interim~~normal ~~Unaudited~~course ~~Consolidated~~of ~~Financial~~business ~~Statements~~and are measured at the exchange amount which is the amount of consideration established by and agreed to by the related parties.

~~September~~A 30director of the Company has advanced monies to the Company to pay certain expenses. The advances have no interest rate and is due on demand. The amount owing to the director was $142,400 ($125,117 in 2016).

~~(Amounts~~8. ~~expressed~~CAPITAL ~~in US Dollars)~~STOCK

●a) Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.Authorized

~~At September 30~~300, ~~2016~~000, ~~the only asset measured at fair value using level 1 of the three fair value hierarchy tiers described above~~000 ~~was~~Common ~~cash of $1~~shares,~~059~~ ($~~1,937 – 2015) and accounts payable and accrued liabilities of $21,269 ($47,853 – 2015), loan payable to director and loan payable to related party are measured using amortized cost at level 2~~0.001 ~~The~~per ~~Company did not have any fair~~ value ~~assets or liabilities classified as level 3.~~

~~Liquidity~~b) ~~risk:~~Issued

The Company monitors its liquidity position regularly to assess whether it has the funds necessary to fulfill planned commitments on its alternative energy technology or viable options are available to fund such commitments from new equity issuance or alternative sources such as debt financing. However99, ~~as a development stage company and without significant internally generated cash flow~~915,228 ~~there~~Common ~~are~~shares ~~inherent~~(2016: ~~liquidity risks~~99,865,228 ~~including~~Common ~~the~~shares) ~~possibility~~valued ~~that~~at ~~additional financing may not be available to the Company~~$99,815 ~~or that~~(2016: actual development expenditures may exceed those planned. The current uncertainty in global markets could have an impact on the Company’s future ability to access capital on terms that are acceptable to the Company. The Company has so far been able to raise the required financing to meet its obligations on time.$99,765)

109. ~~COMMITMENT~~ SEGMENTED INFORMATION

~~a) Pursuant to Note 1 (c)~~The Company, ~~under~~after ~~the~~reviewing ~~Technology~~its ~~License~~operating ~~purchased by Pavana~~systems, ~~the Company~~ has adetermined ~~commitment~~that ~~for~~it ~~royalties~~has atno ~~the~~reportable ~~rate~~segment ofand 5%geographic ~~for all revenues derived by Pavana using this technology~~segment. b)The ~~Pursuant to the purchase of intellectual property from Serge Bolotov, the~~ Company’s operations ~~has~~are ~~a commitment for royalties at the rate of 10% for~~ all ~~profits~~related ~~generated~~to by the ~~sale~~provision of ~~this~~wind-driven ~~technology~~solutions ~~and~~for apower ~~purchase~~generation. ~~bonus~~All ofassets ~~$1,000,000 to be paid out~~ of ~~11% of~~ the ~~net~~business ~~profits~~are ~~from~~located in the ~~intellectual~~United ~~property.~~States ~~c) Following completion~~ of ~~sufficient funding of the Company or related or assigned party, the following shall occur~~America.

			a.	Serge Bolotov will be paid the sum of Cdn $8,000 per month in cash or shares, as long as Bolotov is needed to consult with the Company or a related or assigned party
			b.	The Company or related or assigned party will provide research and development facility with support staff.

10. COMMITMENT AND CONTINGENCIES

d) The Company or a related or assigned party will act to appoint Serge Bolotov as a member of the Board of Directors. Upon successful appointment to the Board, the Company or a related or assigned party will issue Bolotov 100,000 common shares in consideration for his Board of Director appointment.

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

	b)	Pursuant to the purchase of intellectual property from Serge Bolotov (the “vendor”), the Company has the following commitments related to the purchase:

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

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

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

Page 10

First National Energy Corporation

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

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

Condensed Notes to the Interim Unaudited Consolidated Financial Statements

September 30, 2016

(Amounts expressed in US Dollars)

11. CAPITAL MANAGEMENT

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

Capital structure and debt capacity are taken into account when deciding new investments. ~~Practical~~and ~~tools~~the toCompany ~~manage~~may ~~capital~~consider ~~include application of dividend policy,~~ share buybacks and share issuances as other strategies. Debt capital is managed considering the requirement to secure liquidity and the capability to refinance maturing debt.

~~The~~On ~~Group’s~~March ~~internal~~31, ~~capital~~2017, ~~structure is reviewed on a regular basis with an aim to optimize~~ the ~~structure e.g. by applying internal dividends and equity adjustments. Net investment in foreign entities is monitored and the~~ Company ~~has~~had ~~the~~no ~~intent~~interest-bearing ~~to hedge related translation risk~~debt.

On12. ~~September~~FINANCIAL ~~30, 2016 the Company does not have any interest-bearing debt.~~INSTRUMENTS

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

Foreign exchange risk:

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

Liquidity risk:

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

Page 11

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

Unless otherwise indicated, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” are to the Company, unless the context requires otherwise. The following discussion and analysis by our management of our financial condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and the accompanying related notes included in this quarterly report and our audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2015~~2016 filed with the Securities and Exchange Commission.

Cautionary Statement Regarding Forward-Looking Statements

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

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

Additional information concerning these and other risks and uncertainties is contained in our filings with the Securities and Exchange Commission, including the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2015~~2016.

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

Page 12

Description of Business

Business Development

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

Page 12

As described in the definitive information statement on Form DEF 14-C filed with the Securities and Exchange Commission on December 22, 2008, and pursuant to the approval of our board of directors and a majority of its stockholders, on February 12, 2009, we effected a reorganization which had the effect of (1) implementing a reverse stock split of its issued and outstanding common shares at the rate of 100 to 1, thereby reducing the number of issued and outstanding common shares at that time from 76,522,760 to 765,228, with no effect on the number of authorized common shares; (2) merging our company with and into First National Power Corporation, a Nevada corporation and a wholly-owned indirect (second tier) subsidiary of our company , such that First National Energy Corporation, a Nevada corporation and a wholly-owned direct (first tier) subsidiary of our company, succeeded as a successor issuer of its registered securities and continued our business for all purposes; (3) exchanging each issued and outstanding share on the record date (and after giving effect to the reverse stock split described above) into one new common share of the successor issuer ; (4) re-domesticating the our charter from the State of Delaware to the State of Nevada; (5) increasing the authorized capital from 100 million common shares to 300 million common shares; (6) changing our name from “First National Power Corporation” to “First National Energy Corporation”; and (7) changing our stock symbol from FNPR to FNEC.

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

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

In addition, we acquired technology rights to an additional territory for the licensed technology through a wholly-owned subsidiary, Pavana Power Corporation.

Business of Issuer

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

Page 13

Except as described above and as more particularly described in our accompanying interim financial statements, there have been no other material changes in our financial condition from the end of the preceding fiscal year to the date of the interim balance sheet provided herein, nor have there been any other material changes in the registrant’s financial condition during the period ending on the date of the interim balance sheet provided herein and commencing on the corresponding interim date of the preceding fiscal year. Except as described above and as more particularly described in our accompanying interim financial statements, there have been no material changes in our results of operations with respect to the most recent fiscal year-to-date period for which an income statement is provided and the corresponding year-to-date period of the preceding fiscal year.

Critical Accounting Policies and Estimates

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

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

Page 13

Recently Issued Accounting Pronouncements.

See Note 1, Recently Issued Accounting Pronouncements, of the Notes to the accompanying interim financial statements, included in Item 1 of this report, for recently issued accounting pronouncements.

Plan of Operation

Since acquiring the technology license described above, our management has expended significant time seeking sources of capital to implement its business plan, which is primarily designed to exploit the licensed technology throughout the United States and Canada for commercial gain. In addition, we have acquired technology rights to an additional territory for the licensed technology through Pavana Power Corporation, a Nevada corporation, a wholly-owned subsidiary that was organized on April 21, 2011.. There is no assurance that the Registrant will be successful in raising capital or closing any such merger or acquisition transactions.

Results of Operations

~~Nine~~Three Months Ended ~~September~~March 3031, ~~2016~~2017, compared to the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2015~~2016

Assets

Licensed technology assets, net of amortization, were unchanged at $200

Revenues

We did not generate any operating revenues in the ~~nine~~three months ended ~~September~~March 3031, ~~2016~~2017.

Costs and Expenses

Page 14

Amortization of Acquired Technology

There was no amortization of our technology assets during the three months ended ~~September~~March 3031, ~~2016~~2017, as compared to $-0- during the ~~comparable~~ comparable period in ~~2015~~2016.

General and Administrative

Operating expenses increased to $~~-0-~~19,272 during the three months ended ~~September~~March 3031, ~~2016~~2017, as compared to $~~-0-~~12,392 during the comparable period in ~~2015~~2016.

Nine Months Ended September 30, 2016, compared to the Nine Months Ended September 30, 2015

Assets

Licensed technology assets, net of amortization, were unchanged at $200

Revenues

We did not generate any operating revenues in the three months ended September 30, 2016.

Costs and Expenses

Amortization of Acquired Technology

There was no amortization of our technology assets during the three months ended September 30, 2016, as compared to $-0- during the comparable period in 2015.

General and Administrative

Operating expenses increased to $-0- during the three months ended September 30, 2016, as compared to $-0- during the comparable period in 2015.

Liquidity and Capital Resources

Cash ~~and~~ ~~cash~~was ~~equivalents were~~ $1,059 at ~~September~~March 3031, ~~2016~~2017, compared to $1,~~937~~059 at December 31, ~~2015~~2016.

~~Net cash~~Total ~~used in~~ operating ~~activities~~expenses ~~was~~were $1019,~~560~~272 ~~for~~ during the ~~nine~~three months ended ~~September~~March 3031, ~~2016~~2017 compared to $~~-0-~~12,392 ~~during~~at ~~the comparable~~March ~~period~~31, ~~in 2015~~2016.

We generated $~~-0-~~17,283 from financing activities during the three months ended ~~September~~March 3031, ~~2016~~2017 compared to $~~-0-~~18,473 during the comparable period in ~~2015~~2016 due to additional funding by a shareholder. In the three months ended March 31, 2017, management also closed a private placement for $16,500 as additional funding

~~We are~~Our Company is a development stage company and have not generated any operating revenues as of ~~September~~March 3031, ~~2016~~2017. In addition, we will continue to incur net losses and cash flow deficiencies from operating activities for the foreseeable future.

Based on its cash flow projections, we will need additional financing to carry out its planned business activities and complete its plan of operations through December 31, ~~2016~~ 2017. At ~~the~~our Company’s present level of activities, ~~the~~our Company’s cash ~~and cash~~is ~~equivalents are~~ considered insufficient and this draws a substantial doubt as to ~~the~~our Company’s ability to continue as a going concern.

Page 14

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

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

The Company’s independent registered public accounting firm expressed substantial doubt about the Company’s ability to continue as a going concern in the audit report on the Company’s audited financial statements for the fiscal year ended December 31, 2015 included in the 2015 Form 10-K and in the footnotes to these unaudited financial statements for the quarter ended September 30, 2016.

Off-Balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

As of ~~September~~March 3031, ~~2016~~2017, the Registrant carried out an evaluation of the effectiveness of the Registrant’s disclosure controls and procedures (as defined by Rule 13a-15(e) under the Securities Exchange Act of 1934) under the supervision and with the participation of the Registrant’s chief executive and chief financial officer. Based on and as of the date of such evaluation, the aforementioned officer has concluded that the Registrant’s disclosure controls and procedures were not effective.

The Registrant also maintains a system of internal accounting controls that is designed to provide assurance that assets are safeguarded and that transactions are executed in accordance with management’s authorization and properly recorded. This system is continually reviewed and is augmented by written policies and procedures, the careful selection and training of qualified personnel and an internal audit program to monitor its effectiveness.

Changes In Internal Control Over Financial Reporting

During the interim period ended ~~September~~March 3031, ~~2016~~2017, there were no changes to this system of internal controls or in other factors that ~~could~~ could significantly affect those controls.

Page 15

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

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

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~The Registrant~~In ~~has~~the ~~not~~three ~~sold~~months ~~any~~ended ~~unregistered~~March ~~equity~~31, ~~securities~~2017, ~~during~~management also ~~the~~closed ~~period~~for ~~covered~~a byprivate ~~this~~placement ~~report~~for $16,500 for 50,000 shares of common stock.

Other than the above, the Registrant has not sold any unregistered equity securities during the period covered by this report.

Item 3. Defaults Upon Senior Securities. Not Applicable.

There were no defaults upon senior securities during the period ended ~~September~~March 3031, ~~2016~~2017.

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Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.		Document
2.1 (7)		Memorandum of Understanding between First National Energy Corporation and Serge Bolotov, dated February 3, 2016, accepted as binding February 5, 2016.
3.1(1)		Articles of Incorporation
3.2 (4)		Articles of Incorporation (Nevada)
3.2(1)		Bylaws
4.1(2)		2005 Stock Incentive Plan For Employees And Consultants (2)
4.2(8)		2016 Omnibus Equity Compensation Plan
10.1(3)		Letter of Intent with Boreas Research Corporation, dated April 17, 2009
10.2(4)		First Amendment Of Technology License And Stock Purchase Agreement with Boreas Research Corporation, dated May 14, 2009
10.3(5)		Novation Agreement with Boreas Research Corporation, dated April 18, 2011.
14.1 (6)		Financial Code of Ethics
31.1*		Sect. 302 Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Sect. 302 Certification Statement of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Sect.
32.1*		Sect. 906 Certification Statement of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
32.2*		Sect. 906 Certification Statement of the Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

Page 16

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

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

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

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

101 INS XBRL Instance Document

101 SCH XBRL Taxonomy Extension Schema Document

101 CAL XBRL Taxonomy Calculation Linkbase Document

101 DEF XBRL Taxonomy Extension Definition Linkbase Document

101 LAB XBRL Taxonomy Labels Linkbase Document

101 PRE XBRL Taxonomy Presentation Linkbase Document

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

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

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

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

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

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

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

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

* Filed herewith

Page 17

SIGNATURES

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

	FIRST NATIONAL ENERGY CORPORATION
Dated: December 21, 2016	/s/ Gregory Sheller
Dated: June 20, 2017	/s/ Gregory Sheller
	Gregory Sheller, Chief Executive Officer

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Filing Compare · First National Energy Corp.