UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL QUARTER ENDED MARCH 31, 2009

COMMISSION FILE NO.: 0-52356

SEAWAY VALLEY CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	20-5996486
(State of other jurisdiction of	(IRS Employer
incorporation or organization	Identification No.)

10-18 Park Street, 2nd Floor, Gouverneur, N.Y. 13642	13642
(Address of principal executive offices)	(Zip Code)

(315) 287-1122

(Registrant's telephone number including area code)

Check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X 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.) 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. (Check One)

Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company X

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

The number of outstanding shares of common stock as of May 19, 2009 was: 353,411,426

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 2009 (UNAUDITED) AND DECEMBER 31, 2008

ASSETS	March 31, 2009			December 31, 2008
Current assets:
Cash	$	158,678		$	590,859
Accounts receivable		290,583			401,157
Inventories		5,435,924			7,416,788
Notes receivable		1,695,675			1,749,092
Marketable securities, trading		-			-
Prepaid expenses and other assets		56,127			104,852
Refundable income taxes		205,213			205,213
Total current assets		7,842,200			10,467,961
Property and equipment, net		10,546,305			10,783,578
Other Assets:
Deferred financing fees		224,400			246,597
Investments		465,973			465,973
Other assets		265,500			265,500
Excess purchase price		3,284,193			3,284,193
Security deposits		32,300			32,300
Total other assets		4,272,366			4,294,563
TOTAL ASSETS	$	22,660,871		$	25,546,102

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Line of credit	$	1,510,334		$	3,065,117
Accounts payable		8,511,093			7,454,894
Accrued expenses		3,040,574			2,907,020
Current portion of long term debt		3,344,354			3,344,799
Convertible debentures		3,117,839			1,735,638
Liabilities of discontinued operations		1,136,848			-
Total current liabilities		20,661,042			18,507,468
Long term debt, net of current		4,720,064			4,834,594
Convertible debentures, net of current		2,813,378			3,785,171
Other liabilities		164,041			184,719
Due to related party		8,000			-
Total liabilities		28,366,525			27,311,952
Commitments and contingencies		-			-
STOCKHOLDERS' EQUITY
Series A voting preferred stock, $.0001 par value; 100,000
shares authorized; 0 and 0 shares issued and outstanding, respectively		-			-
Series B voting preferred stock, $.0001 par value; 100,000
shares authorized; 0 and 100,000 shares issued and outstanding, respectively		-			-
Series C voting preferred stock, $.0001 par value; 1,600,000
shares authorized; 1,391,746 and 1,407,736 shares issued and outstanding, respectively		139			141
Series D voting preferred stock, $.0001 par value; 1,250,000
shares authorized; 881,065 and 881,065 shares issued and outstanding, respectively		88			88
Series E voting preferred stock, $.0001 par value; 100,000
shares authorized; 100,000 and 100,000 shares issued and outstanding, respectively		10			10
Common stock, $0.0001 par value, 10,005,000,000 authorized;
3,454,123 and 2,744,523 shares issued and outstanding, respectively		345			274
Additional paid-in capital		15,277,263			15,265,333
Accumulated deficit		(20,722,785	)		(17,034,508	)
Noncontrolling interest		(260,714	)		2,812
Total stockholders' equity (deficit)		(5,705,654	)		(1,765,850	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	22,660,871		$	25,546,102

The notes to the consolidated financial statements are an integral part of these statements.

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

(UNAUDITED)

	2009			2008

Revenue	$	2,988,148		$	2,653,041
Cost of revenue		2,574,153			1,973,836

Gross profit		413,995			679,205

Gain on sale of securities, net		-			52,932

Operating expenses:
Selling, general and administrative expenses
(including stock based compensation of
$12,000 and $0 respectively)		2,026,055			1,869,863
Total operating expenses		2,026,055			1,869,863

Operating loss		(1,612,060	)		(1,137,726	)

Other income (expense):
Unrealized gain (loss) on derivative instruments		-			(932,069	)
Interest expense		(934,766	)		(497,919	)
Interest income		-			37,392
Other income (expense)		16,738			(53,251	)
Total other income (expense)		(918,028	)		(1,445,847	)

Loss from continuing operations		(2,530,088	)		(2,583,573	)

Discontinued operations
Loss on disposal of discontinued operations		(1,114,370	)		-
Loss from discontinued operations		(304,532	)		(346,783	)
Total discontinued operations		(1,418,902	)		(346,783	)

Loss before provision for income taxes		(3,948,990	)		(2,930,356	)

Provision for income taxes		-			-

Net loss		(3,948,990	)		(2,930,356	)

Less: Net loss attributable to the noncontrolling interest		(263,525	)		-

Net loss attributable to Parent Company	$	(3,685,465	)	$	(2,930,356	)

Basic and diluted loss per share - continuing	$	(0.74	)	$	(13.59	)
Basic and diluted loss per share - discontinued		(0.41	)		(1.82	)
Basic and diluted loss per share	$	(1.15	)	$	(15.41	)

Weighted average of shares of common stock
Outstanding, basic		3,215,702			190,220

The notes to the consolidated financial statements are an integral part of these statements.

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

(UNAUDITED)

	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Continuing Operations
Net loss from continuing operations	$	(2,530,088	)	$	(2,583,573	)
Adjustments to reconcile net loss to net cash provided
by continuing operating activities:
Deferred taxes		-			-
Depreciation and amortization		184,859			90,629
Gain on marketable securities		-			(52,434	)
Unrealized gain on derivatives		-			932,069
Amortization of deferred financing fees		22,197			35,496
Stock based compensation		12,000			-
Amortization of debt discount		410,408			236,008
Accrued interest		136,182			-
Change in assets and liabilities:
Accounts receivable		110,574			110,774
Inventory		1,980,864			653,299
Prepaid expenses and other assets		48,725			86,231
Related party		8,000			-
Security deposits		-			(12,011	)
Accounts payable		1,056,199			(1,457,754	)
Accrued expenses		70,453			102,790
Other liabilities		(20,678	)		-
Cash Provided by (Used in) Continuing Operating Activities		1,489,695			(1,858,476	)
Discontinued operations
Net loss from discontinued operations		(1,418,902	)		(346,783	)
Adjustments to reconcile net loss to net cash
provided by discontinued operating activities:
Deferred taxes		-			-
Depreciation and amortization		72,097			18,273
Loss on disposal of discontinued operations		1,114,370			-
Change in assets and liabilities
Accrued expenses		-			-
Cash Used in Discontinued Operating Activities		(232,435	)		(328,510	)

Cash Provided By (Used in) Operating Activities	$	1,257,260		$	(2,186,986	)

The notes to the consolidated financial statements are an integral part of these statements.

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

(UNAUDITED)

	2009			2008
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	$	(19,683	)	$	(42,879	)
Cash Used in investing activities		(19,683	)		(42,879	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing fees		-			(260,000	)
Borrowings on (repayments of) line of credit		(1,554,783	)		2,392,169
Proceeds from convertible debentures		-			175,000
Repayment of long term debt		(114,975	)		(205,142	)
Cash Provided (Used in) by financing activities		(1,669,758	)		2,102,027

Net Decrease in Cash		(432,181	)		(127,838	)
Cash at Beginning of Period		590,859			1,116,003
Cash at End of Period	$	158,678		$	988,165

Cash paid during the period for:
Interest	$	271,991		$	226,415
Income taxes	$	7,061		$	-

SUPPLEMENTAL STATEMENT OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Conversion of convertible debt and accrued interest into common stock	$	-		$	158,322

Warrants issued with debt	$	-		$	728,170

Conversion of preferred stock into common stock	$	2		$	-

Convertible debentures issued in exchange for notes payable	$	-		$	2,299,662

Discount issued upon issuance of derivative	$	-		$	2,049,957

The notes to the consolidated financial statements are an integral part of these statements.

SEAWAY VALLEY CAPITAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

(UNAUDITED)

NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements 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. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of operations have been included. The results of operations for the three months ended March 31, 2009 are not necessarily indicative of the results of operations for the full year. When reading the financial information contained in this Quarterly Report, reference should be made to the financial statements, schedule and notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2008.

NOTE 2- GOING CONCERN

The financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. As of March 31, 2009, the Company has generated revenues of $3 million but has incurred a net loss of approximately $4.0 million. The Company also has a working capital deficit and is in default on its credit facility. Its ability to continue as a going concern is dependent upon achieving sales growth, reduction of operation expenses and ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

The Company intends to overcome the circumstances that impact its ability to remain a going concern through an increase of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company's ability to obtain additional funding will determine its ability to continue as a going concern. There can be no assurances that these plans for additional financing will be successful. Failure to secure additional financing in a timely manner and on favorable terms if and when needed in the future could have a material adverse effect on the Company's financial performance, results of operations and stock price and require the Company to implement cost reduction initiatives and curtail operations. Furthermore, additional equity financing may be dilutive to the holders of the Company's common stock, and debt financing, if available, may involve restrictive covenants, and may require the Company to relinquish valuable rights.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Deferred Financing Fees and Debt Discounts

Deferred finance costs represent costs which may include direct costs paid to or warrants issued to third parties in order to obtain long-term financing and have been reflected as other assets. Costs incurred with parties who are providing the actual long-term financing, which generally may include the value of warrants, fair value of the derivative conversion feature, or the intrinsic value of beneficial conversion features associated with the underlying debt, are reflected as a debt discount. These costs and discounts are generally amortized over the life of the related debt. In connection with debt issued during the three months ended March 31, 2009, the Company recorded no debt discounts. Amortization expense related to these costs and discounts were $432,605 for the three months ended March 31, 2009, including $410,408 in debt discount amortization included in interest expense on the Statement of Operations.

Derivative Financial Instruments

Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended and EITF Issue No. 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock" require all derivatives to be recorded on the balance sheet at fair value. The beneficial conversion features of the convertible debentures are embedded derivatives and are separately valued and accounted for on our balance sheet with changes in fair value recognized during the period of change as a separate component of other income/expense. Fair values for exchange-traded securities and derivatives are based on quoted market prices. The pricing model we use for determining fair value of our derivatives is the Black-Scholes Pricing Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management's judgment and may impact net income.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At March 31, 2009, the Company had a full valuation allowance against its deferred tax assets.

Estimated Fair Value of Financial Instruments

The Company's financial instruments include cash, accounts payable, long term debt, line of credit, convertible debt and due to related parties. Management believes the estimated fair value of cash, accounts payable and debt instruments at March 31, 2009 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments. Fair value of due to related parties cannot be determined due to lack of similar instruments available to the Company.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Net Income (Loss) per Common Share

In accordance with SFAS No. 128, "Earnings Per Share," Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) adjusted for income or loss that would result from the assumed conversion of potential common shares from contracts that may be settled in stock or cash by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The Company had 35,247 warrants outstanding at March 31, 2009 and 2008, respectively. The inclusion of the warrants and potential common shares to be issued in connection with convertible debt have an anti-dilutive effect on diluted loss per share because under the treasury stock method the average market price of the Company's common stock was less than the exercise prices of the warrants, and therefore they are not included in the calculation.

Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133” (SFAS 161). SFAS 161 requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The adoption of SFAS 161 is not expected to have a material impact on our financial position, results of operations or cash flows.

NOTE 4 -SEGMENT INFORMATION

The Company has three reportable segments in 2009: retail sales, hospitality and investment portfolio management.

	Three Months Ended March 31, 2009
	Retail			Hospitality			Investing		Total
Revenue
Merchandise sales and third party income	$	2,200,021		$	788,127		$	-	$	2,988,148
Realized and unrealized gain on securities		-			-			-		-
Total revenue		2,200,021			788,127					2,988,148

Cost and expenses
Cost of revenue		2,036,318			337,307			-		2,373,625
Selling and administrative		1,662,492			557,030			-		2,219,522
Interest expense		733,329			201,437			-		934,766
Other income		(16,738	)		-			-		(16,738	)
Total costs and expenses		4,415,401			1,095,774			-		5,518,236

Loss from continuing operations	$	(2,222,441	)	$	(307,647	)	$	-	$	(2,523,027	)

Total assets	$	14,697,962		$	7,962,909		$	-	$	22,660,871

Capital expenditures	$	19,683		$	-		$	-	$	19,683

The Company has two reportable segments in 2008: retail sales and investment portfolio management.

	Three Months Ended March 31, 2008
	Retail			Investing		Total
Revenue
Merchandise sales and third party income	$	2,653,041		$	-		$	2,653,041
Realized and unrealized gain on securities		-			52,932			52,932
Total revenue		2,653,041			52,932			2,705,973

Cost and expenses
Cost of revenue		1,973,836			-			1,973,836
Selling and administrative		1,869,863			-			1,869,863
Share based compensation		-			-			-
Interest expense		497,919			-			497,919
Unrealized loss on derivative instruments		932,069			-			932,069
Other expense		15,859			-			15,859
Total costs and expenses		5,424,546			-			5,424,546

Income (loss) from continuing operations	$	(2,636,505	)	$	52,932		$	(2,583,573	)

Total assets	$	19,033,566		$	210,787		$	19,244,353

Capital expenditures	$	42,879		$	-		$	42,879

NOTE 5 - STOCKHOLDERS' EQUITY

The Company has 10,005,000,000 shares of capital stock authorized, consisting of 10,000,000,000 shares of Common Stock, par value $0.0001, 100,000 shares of Series A Preferred Stock, par value $0.0001 per share, 100,000 shares of Series B Preferred Stock, 1,600,000 shares of Series C Preferred Stock, 1,250,000 Shares of Series D Preferred Stock, 100,000 Shares of Series E Preferred Stock, and 1,850,000 shares of undesignated Preferred Stock, $0.0001 par value.

On March 14, 2008 the Company established the 2008 Stock and Stock Option Plan. The number of Shares available for grant under the Plan shall not exceed three thousand two hundred (3,200) Shares. The Shares granted under this Plan may be either authorized but unissued or reacquired Shares. A total of 3,200 shares were outstanding at March 31, 2009 under the plan. On July 16, 2008, the Company established the 2008 Equity Incentive Plan. The number of shares available for issuance under the 2008 Equity Incentive Plan is 10,000. A total of 10,000 shares were outstanding at March 31, 2009 under the 2008 Equity Incentive Plan. On September 26, 2008, the Company established the 2008 Employee Equity Plan. The number of shares available for issuance under the 2008 Employee Equity Plan is 200,000. A total of 135,000 shares were outstanding at March 31, 2009 under the 2008 Employee Equity Plan.

During the three months ended March 31, 2009 holders of Series C Preferred Stock converted 15,990 shares into 589,600 shares of common stock.

STOCK BASED COMPENSATION

During the three months ended March 31, 2009, the Company issued 120,000 shares of common stock to a consultant in exchange for services. The shares were valued at $12,000 based on the value of the shares on the date of the grant.

NOTE 6 – DISCONTINUED OPERATIONS

In March 2009, the Company decided to close two of its retail stores. These reporting units and their operating results have been shown as discontinued operations. The loss on discontinued operations represents the accrual of the remaining lease liability related to these stores.

All assets that will not be utilized in other locations have been written down to their fair value or are fully depreciated at March 31, 2009.

For the three months ended March 31, 2009 loss from discontinued operations consisted of the following:

	2009								2008
	Retail			Hospitality		Total			Retail			Hospitality		Total

Revenue	$	424,690		$	-	$	424,690		$	597,233		$	-	$	597,233

Cost of revenue		330,588			-		330,588			416,324			-		416,324

SG&A expenses		401,954			-		401,954			531,547			-		531,547

Interest expense		-			-		-			-			-		-

Other income (expense)		3,320			-		3,320			3,855			-		3,855

Net loss on discontinued operations	$	(304,532	)	$	-	$	(304,532	)	$	(346,783	)	$	-	$	(346,783	)

Loss on disposal of discontinued operations	$	(1,114,370	)	$	-	$	(1,114,370	)	$	-		$	-	$	-

NOTE 7 - LINE OF CREDIT

On March 4, 2008, Seaway Valley Capital Corporation and its wholly owned subsidiaries, WiseBuys Stores, Inc. and Patrick Hackett Hardware Company, consummated a five million dollar ($5,000,000) credit and security agreement with Wells Fargo Bank, National Association, acting through its Wells Fargo Business Credit operating division (the "Line of Credit"). The funds available under Line of Credit were based on an advance rate of 55% of the Company's current inventory. The initial term of the Line of Credit was three years. These funds were used for general working capital at the Company. In early January 2009, Wells Fargo initiated an advance rate reduction (from the original 55% of inventory) by 1% per week. In mid-January, Wells Fargo agreed to temporarily suspend the rate reduction in the event that Patrick Hackett Hardware Company raise an additional $2 million in equity capital or subordinated debt. The Company was not successful in these capital raising efforts, and in February 2009 Wells Fargo again commenced the reduction of the advance rate. On March 9th, March 18th and April 2nd, Wells Fargo issued default notices under the credit agreement, citing various default events such as failure to reach Tangible Net Worth, Net Cash Flow and Net Income milestones, as well as citing a change of control event as it related to the ALRN transaction. Additionally, Wells Fargo continued to reduce the advance rate, and the loan balance had been reduced from a peak of $4.7 million in December 2008 to approximately $1.2 million at this time.

By April 13, 2009, The Company and Wells Fargo had substantially agreed on a Forbearance Agreement whereby the Company would pursue business activities in an effort to eliminate the Wells Fargo line of credit within 13 weeks. These measures included, among others, the closure of certain Hackett’s stores. This agreement was signed on May 18, 2009.

NOTE 8 - CONVERTIBLE DEBENTURES

Following is a summary of convertible debentures as of March 31, 2009:

	2009

Convertible debentures	$	9,468,282

Less note discounts		(3,537,065	)
Total convertible debentures, net of discounts	$	5,931,217

Convertible debentures, current portion	$	3,989,440
Less note discounts		(871,601	)
Total current portion of convertible debentures		3,117,839

Convertible debentures, net of current portion		5,478,842
Less note discounts		(2,665,464	)
Total convertible debentures, net of current maturities		2,813,378

Total convertible debentures, net of discounts	$	5,931,217

NOTE 9 – FAIR VALUE MEASUREMENTS

Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), which provides a framework for measuring fair value under GAAP. SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. SFAS 157 also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.

Financial assets and liabilities valued using level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets and liabilities valued using level 2 inputs are based primarily on quoted prices for similar assets or liabilities in active or inactive markets. For certain long-term debt, the fair value was based on present value techniques using inputs derived principally or corroborated from market data. Financial assets and liabilities using level 3 inputs were primarily valued using management’s assumptions about the assumptions market participants would utilize in pricing the asset or liability. Valuation techniques utilized to determine fair value are consistently applied.

The table below presents a reconciliation for liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Derivative Liability
	2009			2008

Balance at January 1,	$	-	$	878,499
Total unrealized (gains) losses included in earnings		-		932,069
Debt discounts		-		1,481,338
Balance at March 31,	$	-	$	3,291,906

Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. The Company had no Level 1 or Level 2 financial assets.

NOTE 10- NONCONTROLLING INTEREST

The Company has a noncontrolling interest related to its ownership of 92% of Hackett’s Stores, Inc. which occurred in December 2008. In accordance with Financial Accounting Standards No. 160 “Noncontrolling Interests in Consolidated Financial Statements” the following represents the amounts attributable to the noncontrolling interest for the results of operations and changes in equity for the quarter ended March 31, 2009.

Amounts attributable to:
				Noncontrolling
	Company			Interest			Total

Loss from continuing operations	$	(2,375,818	)	$	(154,270	)	$	(2,530,088	)
Loss from discontinued operations		(1,309,647	)		(109,255	)		(1,418,902	)

Net loss	$	(3,685,465	)	$	(263,525	)	$	(3,948,990	)

				Noncontrolling
	Company			Interest			Total

Stockholders' Deficit at January 1, 2009	$	(1,768,662	)	$	2,812		$	(1,765,850	)
Net loss for the quarter		(3,685,465	)		(263,525	)		(3,948,990	)
Equity transactions, net		9,187			-			9,187

Stockholders' Deficit at March 31, 2009	$	(5,444,940	)	$	(260,713	)	$	(5,705,653	)

NOTE 11 - SUBSEQUENT EVENTS

In January 2009 the Board of Directors of Hackett’s Stores, Inc. (HCKE.PK) approved the issuance of up to 20 million shares of HCKE pursuant to a Regulation S stock offering. In April 2009, this offering commenced raising proceeds of approximately $24,000 in net proceeds to Hackett’s Stores, Inc.

Since March 31, 2009 the Company and its affiliates have made additional payments to the sellers of ALRN of $77,000, with total proceeds made to the ALRN sellers of $120,000.

On April 1, 2009, the Company issued Clark E. Collins a $100,000 13 1/3% Convertible Promissory Note for proceeds of $100,000. The Note, which is due January 1, 2010, is convertible into shares of the Company at a 15% discount to of the average 10 preceding days share price at the time of conversion and is personally guaranteed by Thomas W. Scozzafava and secured with real property owned by Mr. Scozzafava.

On April 3, 2009 Chris Swartz resigned from The Board of Directors of the Company and from his position as Chief Operations Officer.

On April 13, 2009, six of the vendors of Patrick Hackett Hardware Company filed a petition with the United States Bankruptcy Court of the Northern District of New York for relief under Chapter 7 of the US Bankruptcy Code. On April 15th, the petitioning creditors agreed to file a request for a motion to dismiss the case as a result of a Letter Agreement and a Security Agreement between Hackett’s and the trade vendors.

On May 2, 2009 the United States Bankruptcy Court of the Northern District of New York dismissed the involuntary petition filed against Hackett’s.

On April 19, 2009 the Company sold to NCH Partners, LLC the restaurant operations of Good Fello’s Brick Oven Pizza and Wine Bar and Sackets Harbor Brewing Company for the assumption certain debts and agreements to lease the respective facilities for a minimum of five years. The Company retained ownership of the respective real properties and business assets, and NCH Partners, LLC has the right to acquire the business assets at the end of the tenth year for nominal consideration after exercising a five year lease extension. NCH Partners, LLC does not have an option to acquire the real property of either business. Additionally, Seaway Valley Capital Corporation retained ownership of the intellectual property (name, recipes, trademarks, etc) of Sackets Harbor Brewing Company, Inc., and agreed to license these assets to NCH Partners, LLC for a minimal annual fee for use in restaurant operations only. The beer production and third-party beer marketing business was not part of the transaction.

On May 2, 2009, the Company sold its interest in North Country Farms, LLC for $30,000, which represented neither a gain nor loss on the investment.

On May 19, 2009 Seaway Capital, Inc., a holding company 100% owned by Thomas W. Scozzafava, the Company’s CEO and Chairman, was issued 350,000,000 shares of restricted stock for an agreement to exchange its 100,000 Series E Convertible Preferred shares for a $1,500,000 Series F Redeemable Preferred Stock that is non-convertible into common stock of the Company. In July and August of 2009 this transaction was rescinded.

NOTE 12 – RESTATEMENT

The accompanying financial statements have been restated to more accurately reflect the allocation of noncontrolling interest, income tax provisions and expand certain disclosures. A summary of the effect of this change is as follows:

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

	As Restated				As Previously Reported				Change
	March 31, 2009		December 31, 2008		March 31, 2009		December 31, 2008		March 31, 2009		December 31, 2008
ASSETS
Current assets:
Cash	$	158,678	$	590,859	$	158,678	$	590,859	$	-	$	-
Accounts receivable		290,583		401,157		290,583		401,157		-		-
Inventories		5,435,924		7,416,788		5,435,924		7,416,788		-		-
Notes receivable		1,695,675		1,749,092		1,695,675		1,749,092		-		-
Marketable securities, available for sale		-		-		-		-		-		-
Prepaid expenses and other assets		56,127		104,852		56,127		104,852		-		-
Refundable income taxes		205,213		205,213		205,213		205,213		-		-
Total current assets		7,842,200		10,467,961		7,842,200		10,467,961		-		-
Property and equipment, net (Note 3)		10,546,305		10,783,578		10,546,305		10,783,578		-		-
Other Assets:
Deferred financing fees		224,400		246,597		224,400		246,597		-		-
Investments, at cost		465,973		465,973		465,973		465,973		-		-
Other Assets		265,500		265,500		265,500		265,500		-		-
Excess purchase price		3,284,193		3,284,193		3,284,193		3,284,193		-		-
Security deposits (Note 11)		32,300		32,300		32,300		32,300		-		-
Total other assets		4,272,366		4,294,563		4,272,366		4,294,563		-		-
TOTAL ASSETS	$	22,660,871	$	25,546,102	$	22,660,871	$	25,546,102	$	-	$	-

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Line of credit	$	1,510,334		$	3,065,117		$	1,510,334		$	3,065,117		$	-		$	-
Accounts payable		8,511,093			7,454,894			8,511,093			7,454,894			-			-
Accrued expenses		3,040,574			2,907,020			3,040,574			2,907,020			-			-
Current portion of long term debt		3,344,354			3,344,799			3,344,354			3,344,799			-			-
Convertible debentures		3,117,839			1,735,638			3,117,839			1,735,638			-			-
Derivative liability - convertible debentures (Note 8)		-			-			-			-			-			-
Liabilities of discontinued operations		1,136,848			-			1,136,848			-			-			-
Total current liabilities		20,661,042			18,507,468			20,661,042			18,507,468			-			-
Long term debt, net of current		4,720,064			4,834,594			4,720,064			4,834,594			-			-
Convertible debentures payable, net - long term (Note 8)		2,813,378			3,785,171			2,813,378			3,785,171			-			-
Other liabilities		164,041			184,719			164,041			184,719			-			-
Due to related parties		8,000			-			8,000			-			-			-
Total liabilities		28,366,525			27,311,952			28,366,525			27,311,952			-			-
Commitments and contingencies (Note 11)		-			-			-			-			-			-
STOCKHOLDERS' EQUITY
Series A voting preferred stock, $.0001 par value; 100,000 shares authorized; no shares issued and outstanding		-			-			-			-			-			-
Series B voting preferred stock, $.0001 par value; 100,000 shares authorized; 100,000 shares issued and outstanding		-			-			-			-			-			-
Series C voting preferred stock, $.0001 par value; 4,800,000 shares authorized; 1,458,236 shares issued and outstanding		139			141			139			141			-			-
Series D voting preferred stock, $.0001 par value; XXXXX shares authorized; XXXXXX shares issued and outstanding		88			88			88			88			-			-
Series E voting preferred stock, $.0001 par value; XXXXX shares authorized; XXXXXX shares issued and outstanding		10			10			10			10			-			-
Common stock, $0.0001 par value, 2,500,000,000 authorized; 891,391,917 shares issued and outstanding		345			274			345			274			-			-
Additional paid-in capital		15,277,263			15,265,333			15,277,263			15,265,333			-			-
Accumulated deficit		(20,722,785	)		(17,034,508	)		(20,519,013	)		(17,034,508	)		(203,772	)		-
Noncontrolling interest		(260,714	)		2,812			(464,486	)		2,812			203,772			-
Total stockholders' deficiency		(5,705,654	)		(1,765,850	)		(5,705,654	)		(1,765,850	)		-			-
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	22,660,871		$	25,546,102		$	22,660,871		$	25,546,102		$	-		$	-

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

	As Restated						As Previously Reported						Change
	2009			2008			2009			2008			2009			2008

Revenue	$	2,988,148		$	2,653,041		$	2,988,148		$	2,653,041		$	-		$	-
Cost of revenue		2,574,153			1,973,836			2,574,153			1,973,836			-			-

Gross profit		413,995			679,205			413,995			679,205			-			-

Investment gains (losses)		-			52,932			-			52,932			-			-

Operating expenses:
Selling, general and administrative expenses		2,026,055			1,869,863			2,026,055			1,869,863			-			-
Total operating expenses		2,026,055			1,869,863			2,026,055			1,869,863			-			-

Operating loss		(1,612,060	))		(1,137,726	)		(1,612,060	)		(1,137,726	)		-			-

Other income (expense):
Forgiveness of the registration rights penalty		-			-			-			-			-			-
Unrealized gain on derivative instruments		-			(932,069	)		-			(932,069	)		-			-
Interest expense		(934,766	)		(497,919	)		(934,766	)		(497,919	)		-			-
Interest income		-			37,392			-			37,392			-			-
Other income		16,738			(53,251	)		16,738			(53,251	)		-			-
Total other income (expense)		(918,028	)		(1,445,847	)		(918,028	)		(1,445,847	)		-			-

Income (loss) from continuing operations		(2,530,088	)		(2,583,573	)		(2,530,088	)		(2,583,573	)		-			-

Discontinued operations
Loss on disposal of discontinued operations		(1,114,370	)		-			(682,414	)		-			(431,956	)		-
Loss from discontinued operations		(304,532	)		(346,783	)		(186,488	)		(211,783	)		(118,044	)		(135,000	)
Total discontinued operations		(1,418,902	)		(346,783	)		(868,902	)		(211,783	)		(550,000	)		(135,000	)

Loss before provision for income taxes		(3,941,929	)		(2,930,356	)		(3,398,990	)		(2,795,356	)		(550,000	)		(135,000	)

Provision for income taxes		-			-			550,000			135,000			(550,000	)		(135,000	)

Net loss		(3,948,990	)		(2,930,356	)		(3,948,990	)		(2,930,356	)		-			-

Less: Net loss attributable to the minority		(263,525	)		-			(467,298	)		-			(203,773	)		-

Net loss attributable to Parent Company	$	(3,688,277	)	$	(2,930,356	)		(3,481,692	)	$	(2,930,356	)		203,773		$	-

Income (loss) per share from continuing operations – basic	$	(0.79	)	$	(13.59	)	$	(0.96	)	$	(14.30	)	$	0.17-		$	0.71
Income (loss) per share from discontinued operations – basic		(0.44	)		(1.82	)		(0.27	)		(1.11	)		(0.17	)		(0.71	)
Income (loss) per share – basic	$	(1.23	)	$	(15.41	)	$	(1.23	)	$	(15.41	)	$	-		$	-

Weighted average shares of common stock outstanding – basic		3,215,702			190,220			3,215,702			190,220			-			-

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

	As Restated						As Previously Reported						Change
	2009			2008			2009			2008			2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES:
Continuing Operations
Net loss from continuing operations	$	(2,530,088	)	$	(2,583,573	)	$	(3,080,088	)	$	(2,718,573	)	$	550,000		$	135,000
											-
Adjustments to reconcile net income (loss)											-
to net cash provided by continuing operating activities:											-
Deferred taxes		-			-			550,000			135,000			(550,000	)		(135,000	)
Depreciation and amortization		184,859			90,629			184,859			90,629			-			-
Gain on sale of marketable securities		-			(52,434	)		-			(52,434	)		-			-
Unrealized gain on derivative instruments		-			932,069			-			932,069			-			-
Amortization of deferred financing fees		22,197			35,496			22,197			35,496			-			-
Stock based compensation		12,000			-			12,000			-			-			-
Amortization of debt discount		410,408			236,008			410,408			236,008			-			-
Accrued interest		136,182			-			136,182			-			-			-
Change in assets and liabilities:
Accounts receivable		110,574			110,774			110,574			110,774			-			-
Inventories		1,980,864			653,299			1,980,864			653,299			-			-
Prepaid expenses and other assets		48,725			86,231			48,725			86,231			-			-
Related party		8,000			-			8,000			-			-			-
Security deposits		-			(12,011	)		-			(12,011	)		-			-
Accounts payable		1,056,199			(1,457,754	)		1,056,199			(1,457,754	)		-			-
Accrued expenses		70,453			102,790			47,975			102,790			22,478			-
Other liabilities		(20,678	)		-			(20,678	)		-			-			-
Cash Provided by (Used in) Continuing Operating Activities		1,489,695			(1,858,476	)		1,467,217			(1,858,476	)		22,478			-
Discontinued Operations														-			-
Net loss from discontinued operations		(1,418,902	)		(346,783	)		(868,902	)		(211,783	)		(550,000	)		(135,000	)
Adjustments to reconcile net loss to net cash											-
provided by continuing operating activities:											-
Deferred taxes		-			-			(550,000	)		(135,000	)		550,000			135,000
Depreciation and amortization		72,097			18,273			72,097			18,273			-			-
Loss on disposal of discontinued operations		1,114,370			-			-			-			1,114,370			-
Change in assets and liabilities:
Accrued expenses		-			-			1,136,848			-			(1,136,848	)		-
Cash Used in Discontinued Operating Activities		(232,435	)		(328,510	)		(209,957	)		(328,510	)		(22,478	)		-

Cash Provided by (Used in) Operating Activities		1,257,260			(2,186,986	)		1,257,260			(2,186,986	)		-			-

SEAWAY VALLEY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

	As Restated						As Previously Reported						Change
	2009			2008			2009			2008			2009		2008

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(19,683	)		(42,879	)		(19,683	)		(42,879	)		-		-
Cash Used in Investing Activities		(19,683	)		(42,879	)		(19,683	)		(42,879	)		-		-

CASH FLOW FROM FINANCING ACTIVITIES:
Deferred financing fees		-			(260,000	)		-			(260,000	)		-		-
Net borrowings on (repayments of) line of credit		(1,554,783	)		2,392,169			(1,554,783	)		2,392,169
Proceeds from convertible debentures		-			175,000			-			175,000			-		-
Repayments of long term debt		(114,975	)		(205,142	)		(114,975	)		(205,142	)		-		-
Cash Provided by (Used in) Financing Activities		(1,669,758	)		2,102,027			(1,669,758	)		2,102,027			-		-

Net Increase in Cash		(432,181	)		(127,838	)		(432,181	)		(127,838	)		-		-
Cash at Beginning of Year		590,859			1,116,003			590,859			1,116,003			-		-
Cash at End of Year	$	158,678		$	988,165		$	158,678		$	988,165		$	-	$	-

Cash paid during the year for:
Interest	$	271,991		$	226,415		$	-		$	226,415		$	271,991	$	-
Income taxes	$	7,061		$	-		$	-		$	-		$	7,061	$	-

SUPPLEMENTAL STATEMENT OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Conversion of convertible debt and accrued interest into common stock	$	-		$	158,322		$	-		$	158,322		$	-	$	-

Warrants issued with debt	$	-		$	728,170		$	-		$	728,170		$	-	$	-

Conversion of preferred stock into common stock	$	2		$	-		$	2		$	-		$	-	$	-

Convertible debentures issued in exchange for notes payable	$	-		$	2,299,662		$	-		$	2,299,662		$	-	$	-

Discount issued upon issuance of derivative	$	-		$	2,049,957		$	-		$	2,049,957		$	-	$	-

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

In addition to historical information, this Quarterly Report contains forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "estimates," "projects," or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the section entitled "Business Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.

OVERVIEW

Seaway Valley Capital Corporation (“Seaway Valley” or the “Company”) is a venture capital and investment company. Seaway Valley focuses on equity and equity-related investments in companies that require expansion capital and in companies pursuing acquisition strategies. Seaway Valley will consider investment opportunities in a number of different industries, including retail, consumer products, restaurants, media, business services, and manufacturing. The Company will also consider select technology investments. Returns are intended to be in the form of the eventual share appreciation and dispossession of those equity stakes and income from loans made to businesses.

RETAIL HOLDINGS

On October 23, 2007, Seaway Valley acquired all of the capital stock of WiseBuys Stores, Inc. (“WiseBuys”). WiseBuys Stores, Inc. owns and operates five retail stores in central and northern New York. WiseBuys Stores, Inc. was formed and began operations in 2003 as a direct result of the closing of small-town retailer, Ames Department Stores. Founded primarily by lifelong “north country” residents, WiseBuys initially focused its efforts on serving the “discount” retail needs of rural communities throughout northern and central New York.

On November 7, 2007, Seaway Valley purchased all of the outstanding capital stock of Patrick Hackett Hardware Company, a New York corporation (“Hackett’s”). Hackett’s, one of the nation’s oldest retailers, with roots dating back to 1830, is a full line department store specializing in name brand merchandise and full service hardware. At the time of the acquisition, Hackett’s had locations in five towns in upstate New York: Ogdensburg, Potsdam, Watertown, Massena and Canton. Each store features brand name clothing for men, women, and children, and a large selection of athletic, casual, and work footwear. Hackett’s also carries domestics, home décor, gifts, seasonal merchandise and sporting goods. Hackett’s full service hardware department features traditional hardware, tool, plumbing, paint and electrical departments.

Subsequent to the acquisition, WiseBuys has contributed its retail assets to Hackett’s, and management intends to convert the five WiseBuys stores into Hackett’s brand stores. During 2008, the Company operated ten Hackett’s locations - Canton, Gouverneur, Hamilton, Massena, Ogdensburg, Potsdam, Pulaski, Sackets Harbor, Tupper Lake, and Watertown – all in New York.

HOSPITALITY HOLDINGS

On June 1, 2008, Seaway Valley acquired the assets and companies of North Country Hospitality, Inc. “North Country” was formed in 2005 and acquired and developed hospitality assets such as restaurants, lodging and other consumer product companies in northern New York. At the time of the acquisition, North Country owned the following businesses:

Alteri Bakery, Inc.

Alteri Bakery has serviced the North Country region with quality baked goods since 1971. Alteri’s is located in a state of the art baking facility in the heart of Watertown’s business district, and is one of the last traditional Italian bakeries in the area. Alteri's produces the area’s only "true" Italian breads and specialty pastry items, such as cakes, cookies, muffins, bagels, and specialty gift baskets. Alteri’s products can be found at local restaurants, grocery stores, schools, and its own store. In addition, Alteri’s recently assumed the production of sub rolls for the entire Jreck Subs franchise chain of 47 locations, which alone includes approximately two million five hundred thousand rolls baked and shipped annually.

Sackets Harbor Brewing Company, Inc.

Sackets Harbor Brewing Company (“SHBC”) develops, produces, and markets micro brewed beers such as the award winning “War of 1812 Amber Ale” and “Railroad Red Ale” as well as “Thousand Island Pale Ale”, “1812 Amber Ale Light” and “Harbor Wheat” premium craft beers. Its “1812 Amber Ale” is the company’s flagship brand and was the winner of a Silver Award at the 1998 World Beer Championship and has been aggressively marketed to command a significant retail presence in the regional market place. Management estimates 1812 Ale is distributed to over 3,000 retail locations in New York and Florida. The company has also developed complementary products such Sackets Harbor Coffee and Sackets Harbor Brewing Co. Root Beer.

Seaway Restaurant Group

Seaway Restaurant Group ("SRG") is comprised of a dynamic and developing roster of upscale casual- and fine-dining restaurants. Each of the SRG restaurants is unique and memorable, which allows our guests to visit any among them multiple nights during the week to discover something new and exciting upon each visit. The common thread uniting all SRG restaurants is an emphasis on excellent food, superior service, and genuine value. We have been fortunate to receive acknowledgements for our restaurants from both our customers and within the industry.

INVESTMENT FUND

On July 1, 2007, Seaway Valley Capital Corporation assumed the role of Fund Manager of the Seaway Valley Fund, LLC, which is a wholly owned subsidiary of WiseBuys Stores, Inc. As the sole investment manager of the Fund, the Company makes exclusive investment decisions regarding acquisition and dispossession of various securities in the Fund. At the time the Company assumed the management of the Fund on July 1, 2007, its assets totaled approximately $1.83 million. During 2007, the Company successfully negotiated and sold securities on behalf of the Fund that generated gross proceeds of $1.52 million with realized profits of approximately $1.0 million. There was no material activity or assets in the Fund during 2008.

Result of Operations

Three Months Ended March 31, 2009 Compared with Three Months Ended March 31, 2008

The Company’s net sales increased to $2,988,148 for the three month period ended March 31, 2009 from $2,653,041 for the three month period ended March 31, 2008, an increase of $ $335,107. The increase in sales was the result of the acquisition of North Country Hospitality which was not a part of our operations for the three months ended March 31, 2008.

The Company’s cost of goods sold also increased from $1,973,836 for the three months ended March 31, 2008 to $2,373,625 during the same period in 2009. This led to a $64,682 decrease in our gross margin to $614,523 for the three month period ended March 31, 2009 from $679,205 for the three month period ended March 30, 2008.

Net realized and unrealized loss on the sale of securities was $0 during the three month period ended March 30, 2009 versus $52,932 for the same period ended March 31, 2008.

General and administrative expenses during the three months ended March 31, 2009 were $2,219,522 versus $1,869,863 for the same period in 2008. The increase of $ $156,192 was driven by the acquisition of North Country Hospitality.

Seaway Valley Capital Corporation had an operating loss from continuing operations of $2,523,027 for the three months ended March 31, 2009 versus $2,583,573 for the same period ended March 31, 2008. This is related to the fact that the Company had no operations of North Country in the first quarter of 2008 while it had a full three months of operations in 2009.

The Company recognized a loss from discontinued operations of $1,418,902 for the three months ended March 30, 2009, compared to a net loss of $346,783 for the same period in 2008. The primary driver of the 2009 increase in losses was the recognition of the totality of lease obligations remaining on the life of closed Hackett’s stores.

Net losses for the periods ended March 31, 2009 and March 31, 2008 were $3,948,990 and $2,930,356, respectively. The primary drivers for the losses were losses from discontinued operations, increased SG&A expenses, a seasonal ebb in our hospitality holdings, and margin compression at Hackett’s.

Liquidity and Capital Resources

Operations have been funded to date primarily by loans (both bank loans and more recently convertible debentures), contributions by our founders and their associates, and profitable securities sales at Seaway Valley Fund, LLC. The net amount of the bank loans is reflected on our March 30, 2009 balance sheet in the aggregate amount of $9,574,752. The net amount of the convertible debentures is reflected on our March 31, 2009 balance sheet in the aggregate amount of $5,931,217.

On March 4, 2008, Seaway Valley Capital Corporation and its wholly owned subsidiaries, WiseBuys Stores, Inc. and Patrick Hackett Hardware Company (collectively "Seaway" or the "Company"), consummated a five million dollar ($5,000,000) credit and security agreement with Wells Fargo Bank, National Association, acting through its Wells Fargo Business Credit operating division (the "Line of Credit"). The funds available under Line of Credit are based on the Company's current inventory with adjustments based on items such as accounts payable. The term of the Line of Credit is three years. The interest rate on the Line of Credit is equal to the sum of the Wells Fargo prime rate plus one and one-quarter percent (1.25%), which interest rate shall change when and as the Wells Fargo prime rate changes. These funds will be used for general working capital at the Company. Under the terms of the agreement, the subsidiaries are required to maintain certain financial covenants including tangible net worth, net income and net cash flow amounts. At December 31, 2008 these covenants were not met.

The bank has declared the line of credit to be in default and has restricted certain cash receipts and disbursements of the Company until the line is repaid. The balance outstanding on the line of credit was $1,469,081 and $3,023,864 at March 31, 2009 and December 31, 2008, respectively. Due to the default, certain other long term obligations that may be callable by the holders have been classified as current in the accompanying financial statements.

In early January 2009, Wells Fargo initiated an advance rate reduction (from the original 55% of inventory) by 1% per week. In mid-January, Wells Fargo agreed to temporarily suspend the rate reduction in the event that Patrick Hackett Hardware Company raised an additional $2 million in equity capital or subordinated debt. The Company was not successful in these capital raising efforts, and in February 2009 Wells Fargo again commenced the reduction of the advance rate. On March 9th, March 18th and April 2nd, Wells Fargo issued default notices under the credit agreement, citing various default events such as failure to reach Tangible Net Worth, Net Cash Flow and Net Income milestones, as well as citing a change of control event as it related to the ALRN transaction. Additionally, Wells Fargo continued to reduce the advance rate, and the loan balance had been reduced from a peak of $4.7 million in December 2008 to approximately $1.2 million at this time.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4. CONTROLS AND PROCEDURES

Our chief executive officer and chief financial officer participated in and supervised the evaluation of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed by us in the reports that we file is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. The Company's chief executive officer and chief financial officer determined that, as of the end of the period covered by this report, these controls and procedures are not adequate and effective in alerting him in a timely manner to material information relating to the Company that are required to be included in the Company's periodic SEC filings.

There was no change in internal controls over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during the Company’s first fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company's WiseBuys subsidiary is party to the matter entitled Einar J. Sjuve vs. WiseBuys Stores, Inc. et al, which action was filed in the Supreme Court of Oswego County, New York in January 2008. The complaint involves an alleged slip and fall that occurred at WiseBuys’ Pulaski, NY store in 2005. The Plaintiff is alleging damages in the amount of $125,000. WiseBuys has answered the complaint denying the majority of the claims. WiseBuys believes that it has adequate insurance coverage to protect it against any potential liability for the claim. This matter is still pending.

On January 21, 2009 the Company received the complaint “Golden Gate Equity Investors, Inc. v Seaway Valley Capital Corporation.” for monetary damages from an alleged breach of contract. The complaint was filed in the Superior Court of California in San Diego County. On March 2, 2009, Paul and Anaflor Graham acquired from Golden Gate the Company’s $1,132,000 Convertible Debenture issued to Golden Gate and Paul & Anaflor Graham assumed Golden Gate’s $912,500 Secured Promissory Note issued to the Company. Golden Gate is no longer a debenture holder of the Company. On March 20, 2009 the case was dismissed.

ITEM 1A. RISK FACTORS

There has been no material change to the risk factors set forth in Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2008.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None during the three months ended March 31, 2009

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

On March 9th, March 18th and April 2nd, Wells Fargo issued default notices under the credit agreement, citing various default events such as failure to reach Tangible Net Worth, Net Cash Flow and Net Income milestones, as well as citing a change of control event as it related to the ALRN transaction. Additionally, Wells Fargo continued to reduce the advance rate, and the loan balance had been reduced from a peak of $4.7 million in December 2008 to approximately $1.2 million at this time.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following are exhibits filed as part of the Company's Form 10-Q for the period ended March 30, 2009:

Exhibit Number Description

31.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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 on the date indicated.

SEAWAY VALLEY CAPITAL CORPORATION

By:	/s/	THOMAS SCOZZAFAVA
		THOMAS SCOZZAFAVA
		Chairman, Chief Executive Officer
		and Chief Financial Officer
Date:		September 4, 2009

SEAWAY VALLEY CAPITAL CORP 10-Q/A