SECURIITES AND EXCHANGE COMMISSION

SECURIITES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-KSB

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

Date of Report:

December 31, 2007

FIRST NATIONAL POWER CORPORATION

(Exact name of registrant as specified in its charter)


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

#219 – 227 Bellevue Way NE

Bellevue, WA 98004

(Address of principal executive offices)

Registrant’s telephone number:

(416) 918 6987

(Mark One)

[X]

Annual report pursuant to Section 13 or 15(d) of the securities exchange act of 1934 for the fiscal year ended December 31, 2007.

[ ]

Transition report under Section 13 or 15(d) of the securities exchange act of 1934

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

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

Common stock

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

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

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

State issuer’s revenues for its most recent fiscal year:

As of December 31, 2007, the Company has not generated any revenues.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity, as of March 15, 2008: $771,870

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

As of December 31, 2007 there were 76,422,760 common shares issued and outstanding.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

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

PART I

Item 1.

Description of Business

Business Development

First National Power Corporation (First National) was incorporated as Capstone International Corporation on November 16, 2000, in the state of Delaware. The Company has never declared bankruptcy, it has never been in receivership, and it has never been involved in any legal action or proceedings. During the period from its incorporation up until the end of the period covered by this report, the Company has not made any significant purchase or sale of assets.

Business of Issuer

First National is creating a business based on what the Company calls the FNPR Green Energy Power Generation business model. It is designed to develop and implement new technology in the electrical power generation industry and current technology configurations in new and commercial applications.

Principal Products and Services

First National’s goal is to build a Power Company with capabilities to provide proprietary-generating stations located on individual buildings, and Portable units for rural and emergency services with applications for Third World development. It has expanded its business goals to include investments in more traditional and proven technologies but on a smaller scale than a full fledged power utility grade facility.

The Market

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

The Company is in the final stages of discussion and research on a number of small under 20-megawatt facilities to be located in more rural and poorly served communities in both Canada and the US. The Company has identified several technologies that will transform the raw material to power; they have identified viable, stable and capable buyers and willing supportive communities to permit and encourage the projects.

Competition and Competitive Strategy

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

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

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

New and or Innovative Products and Services

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

Sources and Availability of Products and Supplies

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

Dependence on One or a Few Major Customers

Virtually every North American and European building owner is seeking the types of products and services First National is developing. First National is not dependant on either one or a few major consumers.

Patent, Trademark, License & Franchise Restrictions and Contractual Obligations & Concessions

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

The new plants will be built under license from the patent holders, thus abrogating First National Power’s need to protect any patents on the chosen technology.

Governmental Controls and Approvals

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

Existing or Probable Government Regulations

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

Research and Development Activities and Costs

First National has opened discussions with various parties that it hopes will lead to the development of new products or new applications of existing products, but has not undertaken any research and development to date. It has plans to initiate research or development sometime in 2008. The Company is negotiating contractual relationships with two large institutions in North America, who will work with First National to develop, patent and market innovative energy-generating tools.

Compliance With Environmental Laws

The only environmental laws that pertain to the Company’s operations concern restrictions on windmills in some locations, as well as restrictions on the type of structures that can be mounted on top of commercial buildings. Compliance with these rules is not expected to be a major obstacle for the Company.

The new facilities will be granted provincial / state and federal environmental certificates before First National accepts ownership of the plants.

Facilities

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

Employees

First National does not expect to hire employees in the foreseeable future. If the Company requires employees, it expects that they will be hired under a contract with an arms-length third party operator. The Company is presently a “Virtual Management” model corporation. First National has no employees and management works under consulting contracts optimizing cash flow, as well as other efficiencies, such as facilities. The current Board of Directors is made up of one individual who also acts as the officer of the Company. .

Reports to Security Holders

First National will voluntarily make available to securities holders an annual report, including audited financials on Form 10-K or Form 10-KSB.

The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 100 F Street NE, Washington, D.C. 20549. The public may obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

Item 2.

Description of Property.

First National does not own any real property.

The Company does not have any investments or interests in any real estate. First National does not invest in real estate mortgages, nor does it invest in Securities of, or interests in, persons primarily engaged in real estate activities.

Item 3.

Legal Proceedings

First National is not a party to any pending legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders.

No matter was submitted during the fourth quarter of the fiscal year ended December 31, 2007, to a vote of security holders, through the solicitation of proxies or otherwise.

PART II

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

Market Information

The Company’s stock trades on the Over-the Counter Bulletin Board (OTCBB) under the symbol FNPR. During 2006 and 2007, the high and low trading price for each quarter was as follows:


Year ended December 31, 2007	High	Low
1^st quarter, ended March 31, 2007	$ 0.060	$ 0.040
2^nd quarter, ended June 30, 2007	$ 0.060	$ 0.040
3^rd quarter, ended September 30, 2007	$ 0.060	$ 0.040
4^th quarter, ended December 31, 2007	$ 0.050	$ 0.020

Year ended December 31, 2006
1^st quarter, ended March 31, 2006	$ 0.189	$ 0.085
2^nd quarter, ended June 30, 2006	$ 0.178	$ 0.100
3^rd quarter, ended September 30, 2006	$ 0.135	$ 0.035
4^th quarter, ended December 31, 2006	$ 0.098	$ 0.040

In 2005, the Board of Directors for the Company created and approved an Employee Stock Incentive Plan (2005 ESIP). The 2005 ESIP was for 3 million shares and is disbursed by the Board as compensation for services by officers, contractors and consultants.

The Company no longer issues stock under the 2005 ESIP.

In 2004, the Company sold shares under a subscription agreement. In 2007, the 146,000 shares sold under that subscription agreement were issued to the purchasers.

Holders.

As of December 31, 2007, the Company had forty two (42) shareholders of record of its common stock.

Dividends.

As of December 31, 2007, registrant has not paid any dividends to its shareholders. There are no restrictions which would limit the ability of First National to pay dividends on common equity or that are likely to do so in the future. First National does not intend to pay dividends to its shareholders in the foreseeable future.

Recent Sales of Unregistered Securities

The Company has not sold securities during the fiscal year ended December 31, 2006, without registering the securities under the Securities Act of 1933.

Item 6.

Management’s Discussion and Analysis or Plan of Operation.

First National Power Corporation is a developmental stage that spent considerable time working with a US-based inventor to bring the Propless WindPower project forward, but as the project was not progressing as quickly as either party intended, the parties have ceased cooperative efforts.

The Company has design work under way for the development of the Green Oasis, a stand alone power generating, multiple mode communication and other remote service capabilities. The Company is seeking customers who will to take such mobile multiple use machines into remote areas of the world and will encourage the Company to complete the design. With limited research funds, the Company has elected to focus on projects that have a higher potential for success in producing shorter-term revenues.

The Company spent several months working with the Town of Millinocket to design, build and operate a bio-mass facility on their new industrial site. The Company spent several months getting certificates, assurances, contracts and letters of intent in place, only to find the power generating lines were unable to carry the meager load being planned. That project is currently on standby, as the transmission lines are scheduled for upgrades in the next couple of years.

Finally, the Company is in discussions with other partners in areas where power can be easily sold to ready users. The design package that was created for Millinocket can be used in other locations.

Green Energy Power Generation, Green Oasis ™ and “Project Biomass”

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

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

The “Green Oasis” is the company’s development stage project. The initial configuration of the base model has been decided, and consultants are working to bring together the components to determine the power draw, hence the required power generation requirements. Once that base model is actually designed and a prototype produced, the Company has identified the first customer for the unit.

The “Biomass” project will use under-license, existing technologies from one or more available suppliers. The Company has gathered letters of interest from buyers of wholesale power, letters of support from communities willing to license and support such a project, gathered letters of intent from interested suppliers of raw material and been in discussions with potential operators of the facilities. There are 4 separate, distinct and unrelated projects, all to use such Biomass technology on which the Company has been actively moving forward.

Organizational Structure

The Company has no employees and Management works under consulting contracts optimizing cash flow and infrastructure efficiencies. The current Board is made up of one individual who also acts as the Officer of the company. Professionals in their individual fields supply all other services on an “as needed” basis.

Growth, Revenue & Financial Plans

The Company has recently received a loan from York Truck. Management believes the funds now available to the Company will be sufficient to see them to the conclusion of a first tranche financing of one of the projects currently in

development. Once the financing for any of the projects is underway, there will be sufficient funds available to fund the necessary administration.

In the current year, the company is anticipating moving gradually from the development stage to one of an operating company. To accomplish the transformation, the company will be required to raise funds. If the company does solidify a plan that will require funding, they will be seeking either partners that will provide the funding, or they will be offering equity or debt financing, dependant upon the completion of the Company’s business plan. Other expenses administrative in nature will be paid by related and unrelated parties through loans or other means, including the sale of common or preferred stock.

The Company had no off balance sheet transactions during 2007, and expects that as part of the financing options for the projects currently contemplated, that there may well be a need to finance using such alternative financing options in 2008.

Item 7.

Financial Statements

First National Power Corporation

(A Development Stage Company)

Financial Statements

Together with Report of Independent Registered Public Accounting Firm

December 31, 2007 and 2006

Amounts expressed in US Dollars

Index


Report of Independent Registered Public Accounting Firm		3
Independent auditors’ report		4
Balance Sheets as at December 31, 2007 and December 31, 2006		5
Statements of Operations for the years ended December 31, 2007 and December 31, 2006 and for the cumulative period since inception		6
Statements of Cash Flows for the years ended December 31, 2007 and December 31, 2006 and for the cumulative period since inception		7
Statements of Changes in Stockholders’ Deficiency for the period since inception		8 – 9
Notes to Financial Statements		10 - 13


FIRST NATIONAL POWER CORPORATION
(A Development Stage Company)
Balance Sheets
As of December 31, 2007 and December 31, 2006
(Amounts expressed in US Dollars)


		2007	2006

		$	$
ASSETS
	CURRENT ASSETS
	Cash	158,313	203,272
		158,313	203,272

LIABILITIES
	CURRENT LIABILITIES
	Accounts payable and accrued liabilities (note 4)	8,875	23,074
	Loans from shareholders (note 5)	258,313	258,313
		267,188	281,387

	Going Concern – note 2
STOCKHOLDERS’ DEFICIENCY

	CAPITAL STOCK (note 6)	76,424	76,278
	CAPITAL STOCK SUBSCRIBED	-	146
	ADDITIONAL PAID-IN-CAPITAL	320,937	320,937
	DEFICIT, ACCUMULATED DURING THE DEVELOPMENT STAGE	(506,236)	(475,476)
		(108,875)	(78,115)

		158,313	203,272



	APPROVED ON BEHALF OF THE BOARD

		Director

The Notes form an integral part of the consolidated financial statements

Page 5


FIRST NATIONAL POWER CORPORATION
(A Development Stage Company)
Statements of Operations
For the years ended December 31, 2007 and December 31, 2006 and for the cumulative period since inception
(Amounts expressed in US Dollars)






		Cumulative
		Since
		Inception	2007	2006
		$	$	$
OPERATING EXPENSES

	Interest Income	(4,900)	(4,900)	-

	Forgiveness of accounts payable and loans	(47,394)
	General and administrative expenses	327,484	9,842	32,732
	(Gain) Loss on Foreign Exchange	289	338	(49)
	Project development costs (note 8)	227,531	25,480	-
	Interest Expense	3,226	-	279
		506,236	30,760	32,962


NET LOSS		(506,236)	(30,760)	(32,962)

Net loss per share, basic and diluted			$ (0.00)	$ (0.00)

Weighted average common shares outstanding			76,290,360	76,276,760

The Notes form an integral part of the consolidated financial statements

Page 6


FIRST NATIONAL POWER CORPORATION
(A Development Stage Company)
Statements of Cash Flows
For the years ended December 31, 2007 and December 31, 2006 and for the cumulative period since inception
(Amounts expressed in US Dollars)


		Cumulative
		Since
		Inception	2007	2006
		$	$	$
CASH FLOWS FROM OPERATING ACTIVITIES

	Net loss	(506,236)	(30,760)	(32,962)
	Adjustments for items not affecting cash
	Shares issued for services rendered	299,890
	Forgiveness of accounts payable and loans	(47,394)
	Increase (decrease) in accounts payable
	and accrued liabilities	12,874	(14,199)	(1,534)

	Net cash used in operating activities	(240,886)	(44,959)	(34,496)

CASH FLOWS FROM FINANCING ACTIVITIES

	Loans from Shareholders	301,708	-	237,733
	Proceeds from sale of capital stock	26,954
	Proceeds from capital stock subscriptions	70,517

	Net cash provided by financing activities	399,179	-	237,733

NET INCREASE (DECREASE) IN CASH		158,313	(44,959)	203,237
	Cash, beginning of period	-	203,272	35
CASH, END OF PERIOD		158,313	158,313	203,272

INCOME TAXES PAID		-	-	-
INTEREST PAID		3,226	-	279

The Notes form an integral part of the consolidated financial statements

Page 7


FIRST NATIONAL POWER CORPORATION
(A Development Stage Company)
Statements of Changes in Stockholders’ Deficiency
From Inception until December 31, 2007
(Amounts expressed in US Dollars)



						Deficit
			Common		Additional	accumulated
		Common	Stock	Common	Paid-In	during the
		Stock	Number of	Stock	Capital	development
		Amount	Shares	Subscribed	(Discount)	stage

		$		$	$	$

Balance at November 16, 2000
	Issuance of common stock for cash	100	100,000		900
	Net Loss for the Period					(968)

Balance as of December 31, 2000		100	100,000	-	900	(968)

	Issuance of stock for cash	400	400,000		3,600
	Issuance of stock for cash	700	700,000		6,300
	Issuance of stock for cash	850	850,000		7,650
	Currency Translation				100
	Net Loss for the Year					(23,954)

Balance as of December 31, 2001		2,050	2,050,000	-	18,550	(24,922)

	Expiration of rescission offer for
	sale of stock	64	63,536		6,290
	Net Loss for the Year					(26,047)

Balance as of December 31, 2002		2,114	2,113,536	-	24,840	(50,969)

	Stock split 5:1	8,454	8,454,144		(8,454)
	Shares issued for services rendered	200	200,000		79,800
	Net Loss for the Year					(107,245)

Balance as of December 31, 2003		10,768	10,767,680	-	96,186	(158,214)

	Stock split 7:1	64,606	64,606,080		(64,606)
	Shares issued for services rendered	30	30,000		15,870
	Shares subscribed			146	70,371
	Shares issued for services rendered	44	43,000		9,956
	Net Loss for the Year					(75,414)

Balance as of December 31, 2004		75,448	75,446,760	146	127,777	(233,628)

	Shares issued for services rendered	830	830,000		193,160
	Net Loss for the Year					(208,886)

Balance as of December 31, 2005		76,278	76,276,760	146	320,937	(442,514)

	Net Loss for the Year					(32,962)

Balance as of December 31, 2006		76,278	76,276,760	146	320,937	(475,476)

	Net Loss for the Year					(30,760)
	Issue shares bought by subscription	146	146,000	(146)

Balance as of December 31, 2007		76,424	76,422,760	-	320,937	(506,236)

The Notes form an integral part of the consolidated financial statements

Page 8

First National Power Corporation

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007 and 2006

Amounts expressed in US Dollars

GENERAL

The Company was incorporated on November 16, 2000 under the laws of the State of Delaware. The business purpose of the Company was to acquire funeral facilities and the selling of prepaid funeral programs. In January of 2004 the Company changed its business purpose to provision of wind-driven solutions to power generation requirements. Current projects for the company are the completion of commercialization of a number of power generation projects from bio-mass technologies

GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America and applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not generated any revenues from its planned principal operations through December 31, 2007. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of assets and liabilities, and correspondingly revenues and expenses, depend on future events, the preparation of financial statements for any period necessarily involves the use of estimates and assumptions. Actual amounts may differ from these estimates. These financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below. Significant estimates include the recording of accruals and the determination of the valuation of allowances for deferred tax assets.

Financial Instruments

The carrying amount of the Company’s accounts payable and accrued liabilities approximates their fair value, because of the short maturity of these instruments.

Income Taxes

The Company accounts for income taxes under the provisions of Statement of Financial Accounting Standards No. 109, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred income taxes are provided using the liability method. Under the liability method, deferred income taxes are recognized for all significant temporary differences between the tax and financial statement bases of assets and liabilities.

First National Power Corporation

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007 and 2006

Amounts expressed in US Dollars

Current income tax expense (recovery) is the amount of income taxes expected to be payable (recoverable) for the current year. A deferred tax asset and/or liability is computed for both the expected future impact of differences between the financial statement and tax bases of assets and liabilities and for the expected future tax benefit to be derived from tax losses. Valuation allowances are established when necessary to reduce the deferred tax asset to the amount expected to be "more likely than not" to be realized in future returns. Tax law and rate changes are reflected in income in the period such changes are enacted.

Earnings or Loss Per Share

The Corporation has adopted FSA No. 128, “Earnings per Share”, which requires disclosure on the financial statements of “basic” and “diluted” earnings (loss) per share. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average numbers of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.

Comprehensive Income

The Company has adopted SFAS No. 130, "Reporting Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Examples of items to be included in comprehensive income, which are excluded from net income, include foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. Comprehensive income (loss) is not presented in the Company's financial statements since there is no difference between net loss and comprehensive loss in any period presented.

Recent Pronouncements

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

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

First National Power Corporation

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007 and 2006

Amounts expressed in US Dollars

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

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

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115,” SFAS 159 allows entities to voluntarily choose, at specified election dates, to measure many financial assets and financial liabilities (as well as certain nonfinancial instruments that are similar to financial instruments) at fair value. The election is made on an instrument-by-instrument basis and is irrevocable. If the fair value option is elected for an instrument, the Statement specifies that all subsequent changes in fair value for that instrument shall be reported in earnings.

In December 2007, the FASB issued SFAS No. 141 (revised), “Business Combinations”. SFAS 141(R) changes the accounting for business combinations including the measurement of acquirer shares issued in consideration for a business combination, the recognition of contingent consideration, the accounting for preacquisition gain and loss contingencies, the recognition of capitalized in-process research and development, the accounting for acquisition-related restructuring cost accruals, the treatment of acquisition related transaction costs and the recognition of changes in the acquirer’s income tax valuation allowance. SFAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for certain tax adjustments for prior business combinations.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS 160 changes the accounting for noncontrolling (minority) interests in consolidated financial statements including the requirements to classify noncontrolling interests as a component of consolidated stockholders’ equity, and the elimination of “minority interest” accounting in results of operations with earnings attributable to noncontrolling interests reported as part of consolidated earnings. Additionally, SFAS 160 revises the accounting for both increases and decreases in a parent’s controlling ownership interest. SFAS 160 is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited.

The Company believes that the above standards would not have a material impact on its financial position, results of operations or cash flows.

First National Power Corporation

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007 and 2006

Amounts expressed in US Dollars

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities are comprised of the following


	2007	2006
Trade Payables	$654	$8,074
Accrued Professional Fees	$ 8,221	$15,000
	$ 8,875	$

Included in Trade Payables is an amount owing to an officer / director of $0 ($1,618 in 2006)

LOANS FROM SHAREHOLDERS

The loans are unsecured, non-interest bearing and have no specific terms of repayment. The fair value of the loans has been estimated by discounting future cash flows using an estimated rate of return of 5% per annum. The fair value amounts to $246,000. In accounts payable the company has recorded an amount owing to the officer / director of the company in the amount of $0 ($1,618 in 2006).

CAPITAL STOCK

Authorized

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

Issued

76,422,760 Common shares (76,276,760 in 2006)

Changes to Issued Share Capital

During the year ended December 31, 2007, the Company issued 146,000 shares pursuant to the stock subscription agreements, No shares were issued in 2006.

Stock Subscription Agreements

In 2004, the Company has executed subscription agreements to sell 136,000 shares of its common stock at a price or $0.50 per share, and 10,000 shares at $0.25 per share for a total of $70,517. Those shares were issued in November 2007.

First National Power Corporation

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007 and 2006

Amounts expressed in US Dollars

INCOME TAXES

Deferred Income Taxes

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


	2007	2006
Operating Losses Available to offset future taxes	$164,510	$154,513
Valuation Allowance	($164,510)	($154,513)
Net Deferred Assets	$ 0	$

The Company has determined that realization of a deferred tax asset is not likely and therefore a valuation allowance has been recorded against this deferred income tax asset.

Current Income Taxes

Current income taxes consist of


	2007	2006

Amounts calculated at statutory rates	$ (9,997)	$ (10,696)

Permanent differences	0	16
	(9,997)	(10,680)
Change in valuation allowances	9,997	10,696

	$ 0	$ 0

First National Power Corporation

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007 and 2006

Amounts expressed in US Dollars

Income tax losses carried forward

The company has non-capital losses for tax purposes which can be applied against future taxable income. These losses expire as follows:


2027		$ 30,760
2026		32,912
2025		208,887
2024		233,627
Total		$ 506,186

PROJECT DEVELOPMENT COSTS

In accordance with generally accepted accounting principles, fees and expenses incurred while developing a project cannot be capitalized until there is a reasonable expectation of a revenue stream. As the Company is still in the very early stages of power generation projects, it was determined that costs incurred to date had to be expensed.

SEGMENTED INFORMATION

The Company operates in only one business segment, namely the development of alternative energy sources. All of the Company’s assets are located in the United States of America.

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

On August 3, 2004, the Company retained the services of Schwartz Levitsky Feldman, LLP, Chartered Accountants, to act as the auditor for the Company. There are no disagreements between the Company and the auditor.

Item 8A. Disclosure Controls and Procedures

As of December 31, 2007, the Company carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined by Rule 13a-14(c) under the Securities Exchange Act of 1934) under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer. Based on and as of the date of such evaluation, the aforementioned officers have concluded that the Company’s disclosure controls and procedures were effective.

The Company 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. During the fiscal year ended December 31, 2007, there were no significant changes to this system of internal controls or in other factors that could significantly affect those controls.

Item 8B. Other Information

No events required to be reported on Form 8K occurred during the fourth quarter of the fiscal year ended December 31, 2007.

PART III

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

Peter Wanner, Director, Treasurer, Chief Financial Officer. Mr. Wanner, age 54, has 14 years experience as a business consultant to start-up companies, as well as companies in refinancing and turnaround. He also has 15 years of experience in financing accounting, including 2 years in public accounting as well as international experience working in Mexico, United Kingdom and United States. Mr. Wanner has served as a director since May 4, 2004. The term of office for any director is for a period of one year, or until the next annual meeting (or special meeting in lieu of an annual) of the shareholders.

Significant Employees. Other than its executive officer and director, the Company has no other employees.

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

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

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

As of the date of filing this report, the Company is not aware of any person who, at any time during the year ended December 31, 2007, was a director, officer, beneficial owner of more than ten percent of any class of equity securities of the registrant that failed to file on a timely basis reports required by Section 16(a) during the most recent fiscal year or prior years.

Code of Ethics

As of the date of filing this report, the Company has not adopted a Code of Ethics.

Item 10. Executive Compensation.

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

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

The following is a table detailing the current shareholders of our stock as of December 31, 2007, who own 5% or more of the common stock, and shares owned by our Directors and Officers:


Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Common	Peter Wanner	165,000	0.002%
Common	Directors and officers as a group	165,000	0.002%

Item 12. Certain Relationships and Related Transactions.

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

Item 13. Exhibits

Exhibits


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

Item 14. Principal Accountant Fees and Services

Audit Fees:

Aggregate fees billed for each of the last two (2) fiscal years for professional services rendered by the principal accountant for the audit of the annual financial statements and review of financial statements included on Form 10-QSB:

2006:

$9,391

2007:

$9,271

Audit-Related Fees:

Aggregate fees billed in each of the last two (2) fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the financial statements and are not reported previously.

2006:

2007:

Tax Fees:

Aggregate fees billed in each of the last two (2) fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.

2006:

2007:

All Other Fees:

Aggregate fees billed in each of the last two (2) fiscal years for products and services provided by the principal accountant, other than the services previously reported.

2006:

2007:

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

Signatures

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

FIRST NATIONAL POWER CORPORATION

/s/ Peter Wanner

Peter Wanner, CFO

Dated: March 24, 2008

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

/s/ Peter Wanner

Peter Wanner, CFO, Treasurer, Director

Dated: March 24, 2008