UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2011

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the ~~quarterly~~transition period ~~ended~~from ~~September~~__________ ~~30,~~to ~~2009~~__________

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to __________

Commission File Number: 333-56848

SEAWRIGHT HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		54-1965220
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)
(State or other jurisdiction of		(I.R.S. Employer
Incorporation or organization)		Identification No.)

600 Cameron Street, Alexandria, VA 22314

(Address of principal executive offices)

Registrant’s telephone number, including area code: (703) 340-1629

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

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 o No ox

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

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o	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

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

Class Common Stock, $0.001 Par Value Shares Outstanding at ~~June~~September 3015, 2011 14,348,399

SEAWRIGHT HOLDINGS, INC.

INDEX

			Page Number
PART I		Financial Information	Page Number
PART I		Financial Information
	Item 1.	Financial Statements (unaudited)
		Condensed Consolidated Balance Sheets – September 30, 2009 (Unaudited) and December 31, 2008	3
		Condensed Consolidated Balance Sheets – March 31, 2011 (Unaudited) and December 31, 2010	3
		Unaudited Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2009 and September 30, 2008 and for the period from October 14, 1999 (date of inception) through September 30, 2009	4
		Unaudited Condensed Consolidated Statements of Operations – Three Months Ended March 31, 2011 and March 31, 2010 and for the period from October 14, 1999 (date of inception) through March 31, 2011	4
		Unaudited Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2009 and September 30, 2008 and for the period from October 14, 1999 (date of inception) through September 30, 2009	5
		Unaudited Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2011 and March 31, 2010 and for the period from October 14, 1999 (date of inception) through March 31, 2011	5
		Notes to Unaudited Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1916
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	20
	Item 4.	Controls and Procedures	19
	Item 4.	Controls and Procedures	20
PART II		Other Information
	Item 1	Legal Proceedings	2019
	Item 1A.	Risk Factors	20
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
	Item 3.	Defaults Upon Senior Securities	2120
	Item 4.	Removed and Reserved	2120
	Item 5	Other Information	2120
	Item 6.	Exhibits	2120
SIGNATURES			2221
EX-31.1
EX-31
EX-32.1
EX-32

PART I.

FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

SEAWRIGHT HOLDINGS, INC.

SEAWRIGHT HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2011			2010
	(unaudited)
ASSETS
Current assets:
Capitalized financing costs	$	11,874		$	18,757
Total current assets		11,874			18,757

Property and equipment, net		1,230,209			1,233,520

Other assets		30,214			30,214

Total assets	$	1,272,297		$	1,282,491

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Bank overdraft	$	1,857		$	1,857
Accounts payable and accrued expenses		761,173			566,897
Convertible notes payable, net of debt discount, current portion		57,143			47,253
Notes payable, current portion		1,802,800			1,800,775
Notes payable due to related parties, current portion		190,000			65,000
Put liability		150,000			150,000
Other liabilities		50,000			50,000
Total current liabilities		3,012,973			2,681,782

Long-term liabilities:
Note payable due to related party, loan term		-			125,000
Derivative liability		14,900			950
Total liabilities		3,027,873			2,807,732

STOCKHOLDERS' DEFICIT
Preferred stock, par value $0.001 per share; 100,000 shares authorized:		-			-
Series A convertible preferred stock, par value $0.001 per share; 60,000 shares authorized, none issued and outstanding as of March 31, 2011 and December 31, 2010		-			-
Common stock, par value $0.001 per share; 19,900,000 shares authorized; 14,348,399 shares issued and outstanding as of March 31, 2011 and December 31, 2010		14,348			14,348
Common shares to be issued		36,896			36,896
Additional paid in capital		7,432,247			7,370,877
Accumulated deficit during development stage		(9,239,067	)		(8,947,362	)
Total stockholders' deficit		(1,755,576	)		(1,525,241	)

Total liabilities and stockholders' deficit	$	1,272,297		$	1,282,491

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2009			December 31, 2008
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	580		$	580
Prepaid expense		-			31,000
Deferred financing costs, net - current portion		-			6,944
Total current assets		580			38,524
Property and equipment, net		1,275,512			1,286,585
Other assets		30,214			138,776
Total assets	$	1,306,306		$	1,463,885
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Bank overdraft	$	2,539		$	55
Accounts payable and accrued expenses		755,731			295,639
Line of credit		700,427			555,427
Convertible notes payable, net of debt discount		40,000			37,812
Other current liabilities		46,092			-
Notes payable, current portion		1,151,611			1,139,611
Total current liabilities		2,696,400			2,028,544
Long-term liabilities:
Other long term liabilities		-			42,489
Total liabilities		2,696,400			2,071,033
Commitments and contingencies		-			-
STOCKHOLDERS' DEFICIT
Preferred stock, par value $0.001 per share; 100,000 shares authorized
Series A convertible preferred stock, par value $0.001 per share; 60,000 shares authorized, none issued and outstanding as of September 30, 2009 and December 31, 2008		-			-
Common stock, par value $0.001 per share; 19,900,000 shares authorized; 13,598,399 shares issued and outstanding as of September 30, 2009 and December 31, 2008		13,598			13,598
Common shares to be issued		36,896			36,896
Additional paid in capital		6,973,033			6,967,566
Preferred stock dividend		(25,000	)		(25,000	)
Accumulated deficit during development stage		(8,388,621	)		(7,600,208	)
Total stockholders' deficit		(1,390,094	)		(607,148	)
Total liabilities and stockholders' deficit	$	1,306,306		$	1,463,885

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SEAWRIGHT HOLDINGS, INC.

SEAWRIGHT HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

							For the period from
							October 14, 1999
							(date of inception)
	Three months ended March 31,						through
	2011			2010			March 31, 2011
Revenue, net	$	-		$	-		$	19,611

Cost and expenses:
Selling, general and administrative		99,929			113,603			6,538,382
Impairment of trade name		-			-			19,529
(Gain) loss on sale of trading securities		-			-			(37,356	)
Depreciation and amortization		3,311			3,691			82,797
		103,240			117,294			6,603,352

Operating loss		(103,240	)		(117,294	)		(6,583,741	)

Other income (expense):
Other income		-			-			62,302
Gain on sale of property		-			-			1,480,996
Gain on settlement of debt		-			-			1,593,236
Gain (loss) on change in fair value of debt derivative		(13,950	)		-			23,416
Interest expense, net		(174,515	)		(213,763	)		(5,807,177	)

Total other income (expense)		(188,465	)		(213,763	)		(2,647,227	)

Loss from continuing operations before income taxes and discontinued operations		(291,705	)		(331,057	)		(9,230,968	)

Provision for income taxes		-			-			-

Loss from continuing operations before discontinued operations		(291,705	)		(331,057	)		(9,230,968	)

Income from discontinued operations		-			-			16,901

Net loss		(291,705	)		(331,057	)		(9,214,067	)

Preferred stock dividend		-			-			(25,000	)

Net loss attributable to common shareholders	$	(291,705	)	$	(331,057	)	$	(9,239,067	)

Loss per common share, basic and fully diluted	$	(0.02	)	$	(0.02	)

Weighted average number of common shares outstanding, basic and fully diluted		14,348,399			13,598,399

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three months ended September 30,						Nine months ended September 30,						For the period from October 14, 1999 (date of inception) through September 30,
	2009			2008			2009			2008			2009
Revenue, net	$	-		$	704		$	-		$	4,403		$	19,611
Cost and expenses:
Selling, general and administrative		57,476			265,011			370,189			562,449			5,841,993
Impairment of trade name		-			-			-			-			19,529
Gain on sale of trading securities		-			-			-			-			(37,356	)
Depreciation and amortization		3,691			3,729			11,073			11,666			61,031
		61,167			268,740			381,262			574,115			5,885,197
Operating loss		(61,167	)		(268,036	)		(381,262	)		(569,712	)		(5,865,586	)
Other income (expense):
Other income		-			-			-			-			61,969
Gain on sale of property		-			1,448,056			-			1,448,056			1,448,056
Gain on extinguishment of debt		-			-			-			-			807,103
Interest expense, net		(148,994	)		(157,038	)		(407,151	)		(408,061	)		(4,857,064	)
Total other income (expense)		(148,994	)		1,291,018			(407,151	)		1,039,995			(2,539,936	)
(Loss) Income from continuing operations before income taxes and discontinued operations		(210,161	)		1,022,982			(788,413	)		470,283			(8,405,522	)
Provision for income taxes		-			-			-			-			-
(Loss) income from continuing operations before discontinued operations		(210,161	)		1,022,982			(788,413	)		470,283			(8,405,522	)
Income from discontinued operations		-			-			-			-			16,901
Net (loss) income		(210,161	)		1,022,982			(788,413	)		470,283			(8,388,621	)
Preferred stock dividend		-			-			-			-			(25,000	)
Net (loss) income attributable to common shareholders	$	(210,161	)	$	1,022,982		$	(788,413	)	$	470,283		$	(8,413,621	)
(Loss) income per common share, basic	$	(0.02	)	$	0.08		$	(0.06	)	$	0.03
(Loss) income per common share, fully diluted
	$	(0.02	)	$	0.08		$	(0.06	)	$	0.03
Weighted average number of common shares outstanding, basic		13,598,399			13,598,399			13,598,399			13,598,399
Weighted average number of common shares outstanding, fully diluted		13,598,399			13,645,458			13,598,399			13,645,458

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SEAWRIGHT HOLDINGS, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(A DEVELOPMENT STAGE COMPANY)

	Three months ended March 31,						For the period From October 14, 1999 (date of inception) through
	2011			2010			March 31, 2011
Net cash used in operating activities		(61,370	)		(60,059	)		(6,299,152	)
Net cash (used in) provided by investing activities		-			(100,000	)		1,229,622
Net cash provided by (used in) financing activities		61,370			160,059			5,069,530

Net (decrease) increase in cash and cash equivalents		-			-			-

Cash and cash equivalents, beginning of period		-			580			-

Cash and cash equivalents, end of period	$	-		$	580		$	-

Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	-		$	-		$	1,951,963
Cash paid for income taxes	$	-		$	-		$	-

Non cash investing and financing activities:
Common stock issued in exchange for notes payable and accrued interest	$	-		$	-		$	761,515
Common stock issued in exchange for convertible notes payable and accrued interest	$	-		$	-		$	1,507,067
Common stock to be issued in exchange for convertible notes payable	$	-		$	-		$	11,396
Notes payable and accrued interest settled by officer	$	-		$	105,000		$	421,400
Common stock issued in connection with issuance of notes payable	$	-		$	-		$	25,500
Common stock issued in exchange for stock incentive liabilities	$	-		$	-		$	127,500
Transfer of deposit to property and equipment	$	-		$	-		$	57,600
Notes payable issued in exchange for accrued liabilities	$	-		$	-		$	71,413
Notes payable issued in connection with capital expenditures	$	-		$	-		$	1,325,000
Warrants issued in exchange for financing costs	$	-		$	-		$	545,460

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine months ended September 30,						For the period From October 14, 1999 (date of inception) through September 30,
	2009			2008			2009
Net cash used in operating activities	$	(150,467	)	$	(705,216	)	$	(5,453,498	)
Net cash provided by investing activities		-			2,289,520			1,273,145
Net cash provided by (used in) financing activities		150,467			(1,584,169	)		4,180,933
Net increase in cash and cash equivalents		-			135			580
Cash and cash equivalents, beginning of period		580			445			-
Cash and cash equivalents, end of period	$	580		$	580		$	580

Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	-	$	-	$	1,485,063
Cash paid for income taxes	$	-	$	-	$	-
Non cash investing and financing activities:
Common stock issued in exchange for notes payable	$	-	$	-	$	701,552
Common stock issued in exchange for convertible notes payable	$	-	$	-	$	1,447,104
Common stock to be issued in exchange for convertible notes payable	$	-	$	-	$	11,396
Common stock issued in connection with issuance of notes payable	$	-	$	-	$	25,500
Common stock issued in exchange for stock incentive liabilities	$	-	$	-	$	127,500
Transfer of deposit to property and equipment	$	-	$	-	$	57,600
Accounts payable converted to notes payable	$	-	$	-	$	47,300
Notes payable issued in connection with capital expenditures	$	-	$	-	$	1,200,000
Warrants issued in exchange for financing costs	$	-	$	-	$	545,460

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

General

The accompanying unaudited condensed financial statements have been prepared in accordance with ~~Regulation~~accounting ~~S-X~~principles ofgenerally accepted in the ~~Securities~~United ~~and~~States ~~Exchange~~of ~~Act,~~America asfor ~~amended,~~interim financial information and with the instructions to Form 10Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Certain information and notes disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Accordingly, the results from operations for the ~~nine~~three ~~months~~month period ended ~~September~~March 3031, ~~2009~~2011 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2009~~2011. The unaudited condensed financial statements should be read in conjunction with the December 31, ~~2008~~2010 financial statements and footnotes thereto included in the Company's SEC Form 10 K.

The condensed consolidated financial statements as of December 31, ~~2008~~2010 have been derived from the audited consolidated financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America.

Business and Basis of Presentation

Seawright Holdings, Inc., (Company) was formed on October 14, 1999 under the laws of the state of Delaware. The Company is a development stage enterprise, as defined by Accounting Standards Codification subtopic 915-10, Development Stage Entities ("ASC 915-10") and is seeking to develop a spring water bottling and distribution business. From its inception through the date of these financial statements, the Company has recognized minimal revenues and has incurred significant operating expenses. Consequently, its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception through ~~September~~March 3031, ~~2009~~2011, the Company has accumulated losses of $89,~~388~~239,~~621~~067.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Seawright Springs LLC and Knox County Minerals, LLC. Significant intercompany transactions have been eliminated in consolidation.

Reclassification

Certain ~~amounts~~reclassifications inhave ~~the~~been made in prior year’s ~~consolidated~~ financial statements ~~and the related notes have been reclassified~~ to conform to ~~the~~classifications ~~current~~used ~~period~~in ~~presentation.~~the ~~These~~current ~~reclassifications have no effect on previously reported results of operations or loss per share~~year.

Recent Accounting Pronouncements

There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE 2 – GOING CONCERN MATTERS

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed consolidated financial statements during ~~the~~three ~~nine~~ months ended ~~September~~March 3031, ~~2009~~2011, the Company incurred a net ~~losses~~loss of $~~788~~291,~~413~~705, ~~incurred~~had ~~net~~accumulated ~~losses~~deficit ofsince ~~$8,388,621 from~~ its inception onfrom October 14, 1999 through ~~September~~March 3031, ~~2009~~2011 of $9,239,067 and used $56,~~453~~299,~~498~~ 152 in cash for operating activities from its inception through ~~September~~March 3031, ~~2009~~2011. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

The Company's existence is dependent upon management's ability to develop profitable operations. Management is devoting substantially all of its efforts to developing its products and services and there can be no assurance that the Company's efforts will be successful. However, the planned principal operations have not commenced and no assurance can be given that management's actions will result in profitable operations or the resolution of its liquidity problems. The Company is also pursuing additional debt or equity financing through discussions with private investors. There can be no assurance that the Company will be successful in its effort to secure additional financing. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

NOTE 3 – - PROPERTY AND EQUIPMENT

In October, 2003, the Company acquired approximately 140 acres of land and related improvements in Augusta County, Virginia, in exchange for $1,000,000, comprised of $300,000 of cash and a $700,000 promissory note payable. In June 2005, the Company purchased a parcel of land located approximately 10 miles south of the Augusta County, Virginia location in Staunton, Virginia. The purchased parcel is 33.52 acres which the Company acquired for $725,000, comprised of $225,000 of cash and a $500,000 promissory note payable. The Company anticipates entering the sale of bulk spring water and retail bottling business utilizing the properties’ water resources. The Company also completed the purchase of the second Staunton, Virginia property on April 10, 2006. The purchase price for the second property was $240,000, less a previously made $10,000 refundable deposit. The Company paid $90,000 of the remaining purchase price at settlement and has financed the remaining $140,000.

Major classes of property and equipment at ~~September~~March 3031, ~~2009~~2011 and December 31, ~~2008~~2010 consisted of the following:

	September 30, 2009			December 31, 2008
	March 31, 2011			December 31, 2010
Land	$	1,~~023~~000,~~537~~000		$	1,~~023~~000,~~537~~000
Equipment		32,167			32,167
Building improvements		261,307			261,307
		1,317,011			1,317,011
		1,293,474			1,293,474
Less - accumulated depreciation		(4163,~~499~~265	)		(3059,~~426~~954	)
	$	1,~~275~~230,~~512~~209		$	1,~~286~~233,~~585~~520

Depreciation expense was $3,311 and $3,691 for the three month periods ended March 31, 2011 and 2010, respectively.

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE ~~3 –~~4 ~~PROPERTY~~- ~~AND~~NOTES ~~EQUIPMENT (Continued)~~PAYABLE

~~During~~Notes ~~the~~payable ~~year~~at ~~ended~~March ~~December~~ 31, ~~2008,~~2011 ~~the Company sold part of the property acquired in the years ended December 31, 2005~~ and 2006 with a cost basis of $941,463 for proceeds of $2,389,519 recording a net gain from sale of property of $1,448,056. On September 30, 2009, the Company entered into an agreement to sell the remaining part of the property acquired in the years ended December 31, ~~2005~~2010 are ~~and~~as 2006. Net proceeds of $56,477 were received in October 2009 and the Company recognized a net gain of $32,940 in connection with this transaction. Depreciation expense was $11,073 and $11,666 for the nine month periods ended September 30, 2009 and 2008, respectively.follows:

NOTE 4 – LAND PURCHASE OPTIONS

	March 31, 2011		December 31, 2010
15% per annum note payable, monthly interest payments, principal due June 8, 2008, collateralized by land. The note and unpaid accrued interest was settled in May 2010 with a new principal of $375,000, interest at 21% per annum (default rate 24% per annum). The lender added additional $45,000 to the principal in November 2010 when interest payment to Kent Carr loan was made on behalf of the Company. The Company became in default after December 31, 2010 upon the expiration of a forbearance agreement.	$	420,000	$	420,000

7% per annum note payable, due on or before July 1, 2008, uncollateralized. The note and unpaid accrued interest was settled in January 2010, with partial repayment made by the Company’s officer, resulted in a new principal of $150,000 that is subject to adjustment in accordance with gold price. At March 31, 2011 and December 31, 2010, the adjusted principal amount is $191,025 and $189,000, respectively. The Company is in default under the terms of the note at March 31, 2011 and December 31, 2010. (1)		191,025		189,000

6% per annum note payable due to related party, due March 25, 2012, uncollateralized		125,000		125,000

12% per annum (default rate 18%) note payable, due November 1, 2011, collateralized by land		750,000		750,000

Noninterest bearing notes payable due to related party, due on demand, uncollateralized		47,500		47,500

15% per annum (default rate 21%) note payable, due October 13, 2008, collateralized by land. The Company became in default after December 31, 2010 upon the expiration of a forbearance agreement. The default interest rate was 24% pursuant to the forbearance agreement.		375,000		375,000

6% per annum note payable, due November 15, 2008, collateralized by personal guarantee of principle stockholder. The Company was in default under the terms of the note agreement at March 31, 2011 and December 31, 2010.		47,300		47,300

On May 6, 2008, the Company’s’ wholly owned subsidiary, Knox County Minerals LLC (“Knox Minerals”), entered into an Agreement Regarding Option (the “Assignment Agreement”) with James R. Golden and John C. Slusher (the “Option Holders”), under which Knox Minerals agreed to acquire the Option Holders’ rights under a Real Estate Purchase Option dated August 2, 2004 (the “Original Option Agreement”) with Dan D. Stewart and Betsy Stewart (the “Stewarts”) regarding certain land owned by the Stewarts in Knox County, Kentucky (the “Knox Land”). At the time the parties entered into the Assignment Agreement, the Option Holders had allegedly exercised their option to acquire the Knox Land under the Original Option Agreement, which was contested by the Stewarts, and the dispute was before the Kentucky Supreme Court.

Under the Assignment Agreement, the parties agreed that the purchase price for the Option Holder’s rights under the Original Option Agreement was $3,000,000. Knox Minerals deposited $100,000 in escrow, and had 30 days to conduct due diligence to determine whether it wanted to complete the purchase. If Knox Minerals notified the Option Holders that it was declining to complete the purchase within 35 days after the date of the Assignment Agreement, then it was entitled to a full refund of the $100,000 deposit. If it did not elect to terminate the Assignment Agreement, the $100,000 deposit was to be paid to the Option Holders, and would be credited against the purchase price. Knox Minerals was obligated to close within 30 days after the end of the due diligence period in the event it did not elect to terminate the Assignment Agreement. The $100,000 deposit was included in other noncurrent assets of the Company’s consolidated balance sheet as of December 31, 2008.

On June 12, 2008, Knox Minerals and the Option Holders entered into a First Amendment to the Assignment Agreement, under which the parties agreed that the due diligence period would be extended to June 30, 2008, and the deadline for Knox Minerals to terminate the Assignment Agreement would be extended to June 30, 2008.

On July 28, 2008, Knox Minerals and the Option Holders entered into a Second Amendment to the Assignment Agreement, under which the parties agreed that the $100,000 deposit would be paid to the Option Holders and the deposit would be credited against the purchase price, the due diligence period and closing date would be extended to August 14, 2008, and that Knox Minerals had the option to extend the due diligence period to September 2, 2008 provided it notified the Option Holders in writing that it was exercising said option prior to August 14, 2008 and paid the Option Holders an extension fee of $1,000 for each day the periods were extended. Knox Minerals subsequently exercised its option to extend the due diligence date to September 2, 2008, and paid the Option Holders an extension fee of $18,000. The extension fees paid were charged to operations during the year ended December 31, 2008.

On August 25, 2008, Knox Minerals and the Option Holders entered into a Third Amendment to the Assignment Agreement, under which the parties agreed that the due diligence period would be extended to September 30, 2008 in consideration for an additional extension fee of $28,000. The extension fees paid were charged to operations during the year ended December 31, 2008.

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE 45 –- ~~LAND~~NOTES ~~PURCHASE~~PAYABLE ~~OPTIONS~~ (continued)

On September 30, 2008, Knox Minerals and the Option Holders entered into a Fourth Amendment to the Assignment Agreement, under which the parties agreed that the due diligence period would be extended to October 31, 2008 in consideration for an additional extension fee of $31,000, that 50% of the extension fee of $31,000 would be credited against the purchase price, and that Knox Minerals had the option to extend the due diligence period to December 31, 2008 provided it notified the Option Holders in writing that it was exercising said option prior to October 31, 2008 and paid the Option Holders an extension fee of $61,000. The Company paid the extension fees of $31,000 which extended the option through October 31, 2008, the $61,000 extension fees was not paid as the Fifth Amendment to the Assignment Agreement was entered into (see below) on October 31, 2008. The Company accounted for $15,500 (50% of the extension fee of $31,000 paid) as other noncurrent assets as of December 31, 2008.

(Continued)	March 31, 2011			December 31, 2010
Loan against cash value of principle stockholder's life insurance		19,475			19,475

6% per annum note payable due to related party, due on demand, uncollateralized		17,500			17,500
Total		1,992,800			1,990,775
Less: notes payable, current portion		(1,802,800	)		(1,800,775	)
Less: notes payable due to related party, current portion		(190,000)			(65,000	)
Note payable due to related party– long term	$	-		$	125,000

On(1) ~~October~~Theodore 31, 2008, Knox Minerals and the Option Holders entered into a Fifth Amendment to the Assignment Agreement, under which the parties agreed that the due diligence date would be extended to January 30, 2009 if Knox Minerals paid an extension fee of $91,000 within five days, which Knox Minerals paidJ. ~~The~~ ~~Company~~Kanakis ~~charged~~Loan $60,000 of this extension fee to operations for the year ended December 31, 2008, and accounted for the remaining $31,000 as prepaid expense and included in other current assets of the Company’s consolidated balance sheet as of December 31, 2008. The $31,000 prepaid expense was amortized and charged to operations in January 2009.Transactions

On ~~January~~March 2330, ~~2009~~2007, ~~Knox~~Theodore ~~Minerals and the Option Holders entered into a Sixth Amendment to the Assignment Agreement~~J. ~~Prior~~Kanakis to(“Kanakis”) ~~the~~loaned ~~execution of~~ the ~~Sixth~~Company ~~Amendment~~$300,000 onpursuant ~~January~~to ~~10,~~an ~~2009,~~unsecured ~~the~~promissory ~~Option~~note ~~Holders~~bearing ~~acquired~~interest ~~the~~at ~~Knox~~7% ~~Land~~per ~~from~~annum ~~the~~and ~~Stewarts.~~due ~~Under~~July ~~the Sixth Amendment~~1, ~~the~~2008. The ~~parties~~Company ~~agreed~~made topartial ~~increase~~repayment ~~the~~of ~~purchase~~this ~~price~~note ~~for~~during the ~~Knox~~year ~~Land~~ended byDecember ~~the~~31, ~~amount the Option Holders paid the Stewarts for the Knox Land. However~~2008, ~~the~~with ~~parties also agreed that~~ the ~~total~~remaining ~~final~~unpaid ~~purchase~~principal ~~price~~balance ~~would~~of ~~be reduced by~~ $~~140~~187,~~000~~530 asat ~~compared~~December to31, ~~the~~2008. ~~original~~On ~~purchase~~January ~~price~~15, ~~due~~2010, to the ~~decline~~Company ~~in market value of real estate since the time the option agreement was~~ entered into~~. In~~ ~~addition,~~a ~~the~~settlement ~~parties~~agreement ~~agreed~~with ~~that~~Kanakis ~~the~~with ~~due~~regards ~~diligence date would be extended~~ to ~~February~~the ~~28,~~outstanding ~~2009.~~loan Nobalance ~~additional~~and ~~consideration~~unpaid ~~was~~accrued ~~required by the Option Holders for this extension~~interest. ~~The~~ ~~parties~~In ~~further~~connection ~~agreed~~with ~~that if~~ the ~~closing occurred~~settlement, ~~Knox Minerals would be entitled to a credit against~~ the ~~purchase~~President ~~price~~ of ~~$155,500.~~Company ~~That~~repaid ~~is,~~Kanakis ~~the~~on ~~original~~behalf ~~agreed deposit~~ of ~~$100,000,~~the ~~together~~Company with ~~credit~~gold ofcoins ~~$15,500 (50%~~ of ~~the~~his ~~extension fee of $31~~own,~~000~~ ~~from~~with ~~the~~a ~~Fourth~~value ~~Amendment), and additional credit~~ of $40105,000 ~~the~~agreed ~~Option~~by ~~Holders granted to Knox Minerals. In addition~~Kanakis, ~~certain~~and ~~parts of~~ the ~~Knox~~remaining ~~Land~~balance ~~would~~was beconverted ~~conveyed subject~~ to a ~~1/32~~new ~~royalty~~promissory onnote ~~any~~in ~~oil and gas produced from~~ the ~~property,~~amount ~~or 1%~~ of ~~the gross proceeds paid by a subsequent purchaser of the property. Knox Minerals ultimately did not close on Knox Land by the deadline therefore~~$150, ~~and the Assignment Agreement lapsed~~000. The ~~Company~~promissory ~~wrote~~note ~~off~~dated ~~and~~January ~~charged to operations an aggregate of $115,500 (deposit of $100,000 from the Assignment Agreement and the $~~15,~~500~~ of2010 ~~potential~~was ~~credit~~secured ~~from~~by ~~the~~a ~~Fourth~~subordinate ~~Amendment)~~lien ~~upon~~on ~~the~~certain ~~expiration~~property of the ~~Sixth Amendment in the first quarter of the fiscal year 2009~~Company.

~~Subsequent~~On January 15, 2010, the Company, Mr. Kanakis and Mr. Sens entered into a settlement agreement, under which Mr. Sens allowed Mr. Kanakis to retain a coin collection, which the ~~date~~parties agreed and had a fair value of $105,000, Mr. Sens pledged as part of the ~~financial~~settlement ~~statements~~agreement. In addition, ~~Knox~~the ~~Minerals~~Company ~~entered~~issued ~~into~~Mr. Kanakis a ~~Real~~note ~~Estate~~in ~~Purchase~~the ~~Option~~amount (of $150,000 in settlement of the ~~“2010~~Company’s ~~Option”)~~remaining ~~with~~liability due to Mr. Kanakis. The note is secured by a subordinate lien on certain property of the ~~Option~~Company ~~Holders~~in Augusta County, ~~and~~Virginia. The innote ~~April~~entitled ~~2010~~the ~~Knox~~Company ~~Minerals~~to ~~entered~~satisfy ~~into~~the anentire ~~Assignment~~amount ~~and~~due ~~Assumption~~under ~~Agreement~~the ~~with~~note ~~Next~~by ~~Generation~~a ~~Energy~~payment ~~Corp~~of $125,000 on or before March 30, 2010. If ~~(“NGEC”)~~the note is not paid by March 30, ~~under~~2010, ~~which~~interest ~~Knox~~began ~~Minerals~~to ~~assigned~~accrue ~~all~~on the note at the rate of ~~its~~1% ~~right~~per month, ~~title~~with ~~and~~monthly interest ~~under~~payments being due on the ~~2010~~5th ~~Option~~day toof ~~NGEC~~each month. ~~NGEC~~In ~~ultimately~~addition, ~~did~~note ~~not~~provided ~~close~~that ~~and~~if the ~~2010~~price ~~Option~~of ~~lapsed~~gold increased by ~~its~~more ~~terms.~~than ~~Subsequent~~10% tofrom the ~~assignment~~date ~~and~~of ~~before~~execution of the ~~expiration~~note, ofthe principal amount due on the note would increase by the same percentage that the price of gold increased. The note was due and payable on December 31, 2010. In ~~Option~~addition, Mr. Kanakis granted Mr. Sens an option to ~~NGEC~~purchase 500,000 shares (the ~~President~~“Option Shares”) of the Company’s common stock owned by Mr. Kanakis for $51,000. ~~Joel~~The ~~Sens~~principal amount of the note was adjusted to $191,025 ~~became~~and a$189,000 ~~significant~~as ~~shareholder~~of March 31, 2011 and aDecember ~~director~~31, 2010, respectively, in accordance of ~~NGEC~~the ~~(see~~gold ~~Note~~price 9clause. –The ~~Subsequent~~increase ~~Events)~~of $2,025 in the principal amount during the three months ended March 31, 2011 was charged to interest expense.

On January 22, 2011, the Company, Mr. Kanakis and Mr. Sens entered into an agreement, under which Mr. Kanakis agreed to convert the January 15, 2010 note and unpaid accrued interest and fees into 650,000 shares of the Company’s common stock (the “Conversion Shares”). Mr. Kanakis has the right to put the Conversion Shares back to the Company at any time from March 31, 2011 to June 30, 2011 in the event he does not receive total proceeds of $186,500 from the sale of the Conversion Shares and the Option Shares, in which event the put price for the Conversion Shares shall be the January 15, 2010 note. Mr. Kanakis had sold 100,000 of the Option Shares for $12,500, and the parties agreed as part of the settlement that he could sell the remaining Option Shares, subject to a limit price of $0.16 per share. Mr. Kanakis has a potential buyer to purchase the Conversion Shares for $110,000, and if Mr. Kanakis is not paid by the buyer of the Conversion Shares, he has the right to put his rights and claims against the buyer to the Company in lieu of the Conversion Shares. If Mr. Kanakis is able to sell the remaining Option Shares, but does not sell or receive payment for the Conversion Shares, then Mr. Kanakis may put the Conversion Shares back to the Company for the January 15, 2010 note, in which event the Company shall be entitled to a credit of $15,000 on the note. To date the 650,000 shares of common stock have not been issued to Mr. Kanakis. (See subsequent events Note 11)

NOTE 6 – PRIVATE PLACEMENT AND CONVERTIBLE PROMISSORY NOTES PAYABLE

Private Placement in fiscal year 2004 and 2005

The Company entered into a Private Placement Memorandum in August 2004 to offer up to 1,000 units at $3,000 per unit of equity/notes payable instrument. Each unit consists of 2,500 shares of common stock of the Company, $1,500 of convertible promissory notes (“Convertible Notes”), and 1 warrant to purchase 300 shares of the Company’s common stock at $0.85 per share. The Convertible Notes accrues interest at 11% per annum, payable and due in September 2009. The note holder has the option to convert any unpaid note principal and accrued interest to the Company’s common stock at a rate of $0.85 per share anytime after six months from the issuance date of the note.

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE 5 6 – PRIVATE PLACEMENT AND CONVERTIBLE PROMISSORY NOTES PAYABLE (continued)

~~Notes~~As ~~payable~~of atDecember ~~September~~31, 302005, ~~2009~~the Company received total proceeds of $2,665,116, net of placement costs and ~~December~~fees 31of $331,884, ~~2008~~for ~~are~~999 units subscribed. Pursuant to the terms of the Private Placement Memorandum, the Company issued to the investors Convertible Notes in an aggregate of $1,498,500. The Company is obligated to issue 2,497,500 shares of its common stock, valued at $1,563,376, to the investors in connection with the private placement. The Company also issued to investors an aggregate of 999 warrants to purchase 299,700 shares of common stock as ~~follows:~~of December 31, 2005.

	September 30, 2009		December 31, 2008
15% per annum note payable, monthly interest payments, principal due June 8, 2008, collateralized by land – The Company is in default under the terms of the note agreement.		283,000		283,000
7% per annum note payable, due on or before July 1, 2008, uncollateralized. Default interest rate is 2% per month. The Company is in default under the terms of the note agreement.		187,530		187,530
12% per annum note payable, due July 3, 2008, uncollateralized. The Company was in default under the term of the note agreement. This note was acquired by Amicus Funding, Inc. and settled as part of the $112,000 note (see below).		-		50,000
12% per annum note payable, due June 26, 2008, uncollateralized; The Company was in default under the term of the note agreement. This note was acquired by Amicus Funding, Inc. and settled as part of the $112,000 note (see below).		-		50,000
15% per annum (default rate 21%) note payable, due October 13, 2008, collateralized by land. The Company is in default under the term of the note agreement.		375,000		375,000
24% per annum (default rate 30%) note payable, due September 19, 2008, collateralized by common stock of principle stockholder. The Company is in default under the terms of the note agreement.		135,000		135,000
6% per annum note payable, due November 15, 2008, collateralized by personal guarantee of principle stockholder. The Company is in default under the terms of the note agreement		47,300		47,300
Loan against cash value of principle stockholder's life insurance		11,781		11,781
12% per annum note payable, due on or before March 31, 2009, uncollateralized. The Company became in default after the maturity of the note and in November 2009 entered into a settlement and new note with the lender.		112,000		-
		1,151,611		1,139,611
Less: current portion		1,151,611		1,139,611
Note payable – long term	$	-	$	-

In accordance with Accounting Standards Codification subtopic 470-20, Debt With Conversions and Other Options (“ASC 470-20”), the Company allocated, on a relative fair value basis, the net proceeds amongst the common stock, convertible notes and warrants issued to the investors. As of December 31, 2005, the Company had recognized a discount to the notes in the amount of $280,207. The note discount is being amortized over the maturity period of the notes, being five years. As of December 31, 2005, the Company had recognized a total of $280,207 of the proceeds, which is equal to the intrinsic value of the imbedded beneficial conversion feature, to additional paid-in capital and a discount against the Convertible Note. The debt discount attributed to the beneficial conversion feature is amortized over the Convertible Notes’ maturity period, being five years, as interest expense.

In connection with the placement of the Convertible Notes, the Company issued detachable warrants granting the holders the right to acquire a total of 299,700 shares of the Company’s common stock at $0.85 per share as of December 31, 2005. The warrants expire five years from their issuance. As of December 31, 2005, the Company had recognized the value attributable to the warrants, being $190,143, to additional paid-in capital. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions: contractual terms of 5 years, an average risk free interest rate of 3.38%, a dividend yield of 0%, and volatility of 296%.

During the year ended December 31, 2007 the Company offered additional consideration on the convertible debt in an effort to induce conversion. The majority of converting note holders agreed to a conversion rate of one share of common stock for each $0.60 of principal and unpaid interest accrued through the closing date while the minority of converting note holders retained the original conversion rate of one share of common stock for each $0.85 of principal and unpaid interest accrued through the closing date. All converting note holders received an additional six months of interest at the rate of 11% per annum. The Company accounted for the conversion in accordance with ASC 470-20 by recognizing an expense of $1,215,417 which is equal to the excess of the fair value of the additional consideration issued pursuant to the original conversion terms. The note holders agreed to convert a total of $1,458,500 of convertible notes and accrued interest of $138,649 into 2,641,611 shares of common stock. The Company issued 2,628,204 shares of common stock as of December 31, 2007, with the remaining 13,407 shares of common stock accounted for as stock to be issued. The remaining unpaid balance of the convertible debt is $40,000 at March 31, 2011 and December 31, 2010. All debt discount and financing costs related to the convertible debt had been amortized in full upon the maturity of the debt in September 2009.

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE 56 – PRIVATE PLACEMENT AND CONVERTIBLE PROMISSORY NOTES PAYABLE (~~Continued~~continued)

~~Amicus~~Sisler ~~Funding,~~Convertible ~~Inc. Loan~~Note

On ~~February~~October 26, ~~2008~~2010, the Company issued a $5020,000 ~~unsecured~~convertible promissory note ~~payable~~due ~~with~~April ~~12%~~26, ~~per~~2011, ~~annum~~unsecured. The note bears interest at a rate ~~due~~of ~~June~~12% ~~26,~~per ~~2008. On~~annum ~~March~~and 3,will ~~2008,~~be convertible into the Company’s ~~issued~~common astock ~~$50,000~~at ~~unsecured~~any ~~note~~time ~~payable~~after ~~with~~the ~~12%~~maturity ~~per~~date ~~annum~~of ~~interest~~the ~~rate~~note ~~due~~at ~~July~~the 3holder’s option, ~~2008. The~~into ~~Company~~common ~~did~~stock ~~not~~at ~~pay~~the ~~either~~conversion ~~note~~rate onof ~~its~~70% ~~maturity~~of ~~date. Amicus~~average ~~Funding,~~market ~~Inc.~~price ~~(“Amicus”)~~fifteen ~~later~~trading ~~acquired~~days ~~both~~prior ~~notes~~to ~~from~~notice ~~the~~of ~~original lenders~~conversion.

OnThe ~~February~~Company ~~10,~~is ~~2009,~~in ~~the~~default ~~Company,~~under ~~Amicus and~~ the ~~President~~terms of the ~~Company,~~notes. ~~Joel~~The ~~Sens,~~Company ~~entered~~has ~~into~~identified aembedded ~~settlement~~derivatives ~~agreement~~related ~~with respect~~ to the ~~two~~convertible ~~notes~~promissory ~~owned~~note byentered ~~Amicus~~into on October 26, in2010. These ~~which~~embedded ~~the~~derivatives ~~Company~~included ~~paid~~certain ~~Amicus~~conversion ~~$12,000~~features. The inaccounting ~~cash~~treatment ~~and~~of ~~executed~~derivative afinancial ~~note~~instruments ~~payable~~requires tothat ~~Amicus~~the inCompany record fair value of the ~~amount~~derivatives as of ~~$112,000,~~the ~~and~~inception ~~Mr.~~date ~~Sens~~of ~~executed~~the aconvertible promissory note ~~payable~~and to ~~Amicus~~fair invalue ~~the~~as ~~amount~~ of ~~$85,000~~each tosubsequent ~~evidence~~balance asheet ~~personal~~date. At ~~debt~~the ~~Mr.~~inception ~~Sens~~of ~~owed~~the toconvertible ~~Amicus~~promissory ~~resulted~~note, ~~from~~the ~~options~~Company ~~and~~determined ~~stock~~a ~~purchase~~fair ~~agreement~~value ~~between~~$38,316 ~~Amicus~~of ~~and~~the ~~Mr.~~embedded ~~Sens~~derivative. The ~~note~~fair ~~executed~~value byof the ~~Company~~embedded ~~bore~~derivative ~~interest~~was atdetermined ~~12%~~using ~~per annum. All principal and interest due under~~ the ~~note~~Binomial ~~was~~Option ~~due~~Pricing ~~and~~Model ~~payable~~based on ~~March~~the ~~31,~~following ~~2009.~~assumptions:

Subsequent to the date of the financial statements, the Company, Amicus and Mr. Sens entered into a settlement agreement with respect to the notes issued to Amicus under the February 10, 2009 settlement agreement (see Note 9 – Subsequent Events).

Dividend yield:	-0-	%
Volatility	279.98	%
Risk free rate:	0.17	%

~~NOTE~~The 6initial –fair ~~LINE~~value OFof ~~CREDIT~~the embedded debt derivative of $38,316 was allocated as a debt discount up to the proceeds of the note ($20,000) with the remainder ($18,316) charged to interest expense for the year ended December 31, 2010. During the three months ended March 31, 2011, the Company amortized and charged $9,890 of the debt discount to interest expense.

OnA ~~August~~summary ~~28, 2008, the Company entered into a revolving line~~ of ~~credit~~convertible ~~agreement with American Marketing and Capital, Inc. (“AMC”) and issued a Revolving Credit~~ promissory ~~note~~notes topayable ~~AMC in the amount of $200,000. The note bore interest~~ at 2%March ~~per month~~31, ~~and~~2011 ~~matures on October 27, 2008. The note was secured by all non-real estate assets of the Company,~~ and by 980,000 shares of common stock of the Company owned by Joel Sens. On November 7, 2008, the Company and AMC amended their line of credit agreement to increase the amount that the Company could borrow by $360,000, to a maximum of $560,000. The amendment also extended the maturity date of the note to January 6, 2009. Under the amendment, the Company granted AMC a lien on the certain property of the Company located in Augusta County, Virginia to secure the loan, in addition to the collaterals as defined pursuant to the original line of credit agreement dated August 28, 2008. The Company's outstanding balance as of September 30, 2009 and December 31, ~~2008~~2010 isare ~~$700,427~~as ~~and $555,427, respectively.~~follows:

Subsequent to the date of the financial statements, AMC converted the outstanding amount as of May 5, 2010 into a Convertible Note in the principal amount of $440,000. And in November 2010, the Company and AMC entered an agreement under which AMC converted all principal and interest due under the Convertible Note, which was $466,400, into 1,166,000 shares of the Company’s common stock. (See Note 9 – Subsequent Events)

	March 31, 2011			December 31, 2010
Convertible notes payable (“Convertible Notes”); 11% per annum; matured in September 2009; note holder has the option to convert unpaid note principal and interest to the Company’s common stock at $0.85 per share.	$	40,000		$	40,000
Convertible promissory note – 12% per annum, due April 26, 2011, net of unamortized debt discount of $2,857 and $12,747 at March 31, 2011 and December 31, 2010, respectively		17,143			7,253
Total	$	57,143		$	47,253
Less: current portion		(57,143	)		(47,253	)
Convertible Note- long term portion	$	-		$	-

NOTE 7 – COMMON STOCK

The Company was incorporated under the laws of the State of Delaware on October 14, 1999 under the name of Pre-Settlement Funding Corporation. The Company has authorized 100,000 shares of preferred stock, with a par value of $0.001 per share. The Company has designated 60,000 of its preferred stock as Series A Convertible Preferred Stock. As of September 30, 2009 and December 31, 2008, the Company does not have any shares of Series A Convertible Preferred Stock issued and outstanding. The Company has authorized 19,900,000 shares of common stock, with a par value of $0.001 per share. As of September 30, 2009 and December 31, 2008, there were 13,598,399 shares of common stock issued and outstanding.

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE ~~8 –~~7- ~~RELATED~~DERIVATIVE ~~PARTY TRANSACTIONS~~LIABILITY

~~From~~As ~~time~~described toin ~~time~~Note 6 above, on October 26, 2010, the Company’s ~~President~~issued ~~has~~a ~~advanced~~12% ~~funds~~convertible topromissory ~~the~~note ~~Company~~that ~~for~~contained ~~working~~embedded ~~capital purposes~~derivatives. The ~~Company~~embedded ~~had~~derivatives ~~repaid~~included ~~the~~certain ~~advances~~conversion infeatures. ~~full~~The asaccounting treatment of ~~December~~derivative ~~31,~~financial ~~2008.~~instruments Inrequired ~~addition,~~that the Company's ~~President~~record ~~withdrew~~the ~~funds~~derivatives orat ~~incurred~~their ~~personal~~fair ~~expenses~~values inas of the ~~net~~inception date of the convertible promissory note in the amount of $~~648~~38,~~379~~316 ~~from~~and ~~the~~at ~~Company~~fair value as of each subsequent balance sheet date. ~~The~~Any ~~Company~~change ~~has~~in ~~accounted~~fair ~~for~~value ~~the~~was ~~funds~~recorded ~~withdrawn~~as ~~of $648~~non-operating,~~379~~ bynon-cash income or expense at each reporting date. If the ~~Company’s~~fair ~~President~~value asof athe ~~nonreciprocal~~derivatives ~~transfer~~was tohigher aat ~~shareholder~~the ~~and,~~subsequent ~~accordingly,~~balance ~~has~~sheet ~~reflected~~date, the ~~withdrawal~~Company asrecorded a ~~direct~~non-operating, ~~reduction~~non-cash charge. If the fair value of ~~additional~~the ~~paid-in~~derivatives ~~capital~~was lower at ~~December~~the 31subsequent balance sheet date, ~~2008~~the Company recorded non-operating, non-cash income.

~~During~~The ~~the~~Company ~~nine~~recorded ~~months~~a ~~ended~~loss ~~September~~on ~~30,~~change ~~2009,~~in ~~the~~fair ~~Company’s~~value ~~President~~of ~~withdrew~~derivative ~~additional~~liability ~~net amount~~ of $513,~~467.~~950 ~~The Company has accounted~~ for the ~~additional~~three ~~funds~~months ~~withdrawn~~ended asMarch ~~a nonreciprocal transfer to a shareholder and~~31, ~~accordingly, has reflected the withdrawal as a direct reduction of additional paid-in capital at September 30, 2009~~2011.

~~Subsequent~~The tofair ~~the~~value ~~date~~ of the ~~financial~~derivative ~~statements,~~liability ~~the~~at ~~President~~March of31, ~~the~~2011 ~~Company~~was ~~pledged~~determined ~~certain~~using ~~of his personal property including common shares of~~ the ~~Company~~Binomial heOption ~~owned~~Pricing inModel ~~connection~~ with ~~certain loan transactions. Certain loans were also partially repaid by personal property of~~ the ~~President~~following ~~of the Company. (See Note 9 – Subsequent Events)~~assumptions:

NOTE 9 – SUBSEQUENT EVENTS

Dividend yield:	-0-	%
Volatility	357.20	%
Risk free rate:	0.05	%

~~Amicus~~At ~~Funding~~March 31, ~~Inc.~~2011, ~~Loan~~the ~~Transactions~~derivative liability valued at $14,900, the Company believes an event under the contract that would create an obligation to settle in cash or other current assets is remote and has classified the obligation as a long term liability.

AsNOTE ~~described~~8 in- ~~Note~~COMMON 5, in February and March 2008 the Company issued two $50,000 unsecured notes payable. The Company did not pay either note on its maturity date. Amicus Funding, Inc. (“Amicus”) later acquired both notes from the original lenders. On February 10, 2009, the Company, Amicus and the President of the Company, Joel Sens, entered into a settlement agreement with respect to the two notes owned by Amicus, in which the Company paid Amicus $12,000 in cash and executed a note payable to Amicus in the amount of $112,000, and Mr. Sens executed a promissory note payable to Amicus in the amount of $85,000 to evidence a personal debt Mr. Sens owed to Amicus resulted from options and stock purchase agreement between Amicus and Mr. Sens. STOCK

OnThe ~~November~~Company ~~10,~~was ~~2009,~~incorporated under the ~~Company,~~laws ~~Amicus~~of ~~and~~the ~~Mr.~~State ~~Sens~~of ~~entered~~Delaware ~~into~~on aOctober ~~settlement~~14, ~~agreement~~1999 ~~with~~under ~~respect~~the toname ~~the~~of ~~notes~~Pre-Settlement ~~issued~~Funding toCorporation. ~~Amicus~~The ~~under~~Company ~~the~~has ~~February~~authorized 10100,000 ~~2009~~shares ~~settlement~~of ~~agreement. Under~~preferred ~~the November 10~~stock, ~~2009~~with ~~settlement~~a ~~agreement,~~par ~~the~~value ~~Company~~of ~~issued~~$0.001 ~~Amicus~~per ashare. ~~note~~The inCompany ~~the~~has ~~amount~~designated ~~of $140~~60,000 ~~which~~of ~~bore~~its ~~interest~~preferred atstock ~~10%~~as ~~per~~Series ~~annum~~A ~~and~~Convertible ~~was~~Preferred ~~due~~Stock. ~~and~~As ~~payable~~of onMarch ~~January~~31, 292011 and December 31, 2010~~. The~~, ~~note~~the ~~was~~Company ~~subject~~does tonot ahave ~~late~~any ~~charge~~shares of 5%Series ~~for~~A ~~any~~Convertible ~~payment~~Preferred ~~not~~Stock ~~received~~issued byand ~~its due date~~outstanding. The ~~note~~Company ~~was~~has ~~also~~authorized ~~secured~~19,900,000 byshares of common stock, with a ~~subordinate~~par ~~lien~~value onof ~~certain~~$.001 ~~property~~per share. As of ~~the~~March ~~Company~~31, ~~located~~2011 inand ~~Augusta~~December ~~County~~31, ~~Virginia~~2010, there were 14,348,399 shares of common stock issued and outstanding.

OnPut November 10, 2010, Amicus agreed to convert the $140,000 note and total unpaid accrued interest of $10,000 into 375,000 shares of the Company’s common stock. Amicus has the right, until March 30, 2011, to put any of the shares back to the Company for cash in the amount of $0.40 per share. The note was converted and the common shares were issued to Amicus in December 2010.Agreement

On November 10, 2010, Amicus Funding, Inc converted $140,000 debt and total unpaid accrued interest of $10,000 into 375,000 shares of the Company’s common stock. In connection with this transaction, Amicus has the right, until March 30, 2011 (subsequently extended to December 31, 2011), to put any of the shares back to the Company for cash in the amount of $0.40 per share. The note was converted and the common shares were issued to Amicus in December 2010. As such, the Company recorded a potential liability of $150,000.

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE 9 –- ~~SUBSEQUENT~~RELATED ~~EVENTS~~PARTY ~~(continued)~~TRANSACTIONS

~~American~~From ~~Marketing~~time to time, the Company’s President, Joel Sens, has advanced funds to the Company for working capital purposes. At times the total payment the Company repaid to the Company’s’ President and ~~Capital~~(or) the funds the President of the Company withdrew exceeded the total balance due. The Company accounted for the excess payments to the Company’s President as a nonreciprocal transfer to a shareholder and, ~~Inc~~accordingly, has reflected the overpayment as a direct reduction of additional paid-in capital. ~~Loan~~The ~~Transactions~~total balance due from Mr. Sens was $214,243 at December 31, 2010.

AsDuring ~~described in Note 6,~~ the ~~Company~~three ~~obtained~~months aended ~~line~~March of31, ~~credit from American Marketing and Capital~~2011, the ~~Inc.~~aggregate ~~(“AMC”)~~contribution ~~with~~to ~~balance due AMC in~~ the ~~amount~~benefit of ~~$700,427~~the ~~and~~Company ~~$555,427~~by ~~at September 30, 2009 and December 31, 2008, respectively~~Mr. OnSens ~~May~~was 5$61, ~~2010~~370, ~~the~~which ~~Company~~was ~~and~~accounted ~~AMC~~for ~~converted~~as ~~the~~an ~~outstanding~~addition ~~amount owed~~ to ~~AMC~~additional ~~into~~paid-in acapital. ~~Convertible~~The ~~Note~~total inbalance ~~the~~due ~~principal~~from ~~amount of $440,000~~Mr. ~~The~~ ~~Convertible~~Sens ~~Note~~ was ~~due on October 30~~$152,873 ~~2010, bore interest~~ at 6%March ~~per annum~~31, ~~and was convertible into the Company’s common stock at $0~~2011.~~40 per share.~~

OnThe ~~November 9, 2010, the~~ Company’s ~~and~~President ~~AMC~~has ~~entered~~guaranteed ancertain ~~agreement~~loans ~~under~~to ~~which~~the ~~AMC~~Company, ~~converted all principal~~ and/or ~~interest~~pledged ~~due~~certain ~~under~~personal ~~the~~property ~~Convertible~~to ~~Note,~~secure ~~which~~loans ~~was~~to ~~$466,400,~~the ~~into~~Company. The ~~1,166,000~~President ~~shares~~ of the Company’s ~~common~~pledged ~~stock. Of~~certain ~~the~~of ~~shares~~his ~~issued~~personal toproperty ~~AMC,~~including ~~375,000~~common shares ~~were~~of ~~issued by~~ the Company inhe ~~December~~owned ~~2010~~in ~~and~~connection ~~791,000~~with ~~shares~~certain ~~were~~loan ~~supplied by Mr~~transactions. ~~Sens.~~

~~Theodore~~As Jof March 31, 2011 and December 31, 2010, the Company was indebted to Next Generation Energy Corp. ~~Kanakis~~(“NGEC”) ~~Loan~~for ~~Transactions~~$125,000 under a promissory note dated March 25, 2010, which note bears interest at 6% per annum and is due 24 months after the date of the note (Note 5). In addition, as of March 31, 2011 and December 31, 2010 the Company was indebted to NGEC for $17,500 for a loan that bears interest at 6% per annum and is due on demand (Note 5). As of March 31, 2011 and December 31, 2010, the Company was indebted to NGEC for $47,500, which loan is non-interest-bearing and due on demand. In May 2010, Mr. Sens became an officer and director of NGEC, and in October 2010 became a significant shareholder of NGEC.

AsNOTE described in Note 5, Theodore J. Kanakis loaned the Company $300,000 pursuant to an unsecured promissory note bearing interest at 7% per annum and due July 1, 2008. The Company made partial repayment during the year ended December 31, 2008, with remaining outstanding principal in the amount of $187,530 at September 30, 2009 and December 31, 2008. On January 15, 2010, the Company, Mr. Kanakis and Mr. Sens entered into a settlement agreement, under which Mr. Sens allowed Mr. Kanakis to retain a coin collection, which the parties agreed and had a fair value of $105,000, Mr. Sens pledged as part of the settlement agreement. In addition, the Company issued Mr. Kanakis a note in the amount of $150,000 in settlement of the Company’s remaining liability to Mr. Kanakis. The note is secured by a subordinate lien on certain property of the Company in Augusta County, Virginia. The note entitled the Company to satisfy the entire amount due under the note by a payment of $125,000 on or before March 30, 2010. If the note is not paid by March 30, 2010, interest began to accrue on the note at the rate of 1% per month, with monthly interest payments being due on the 5th day of each month. In addition, note provided that if the price of gold increased by more than 10% ~~from~~— ~~the~~FAIR date of execution of the note, the principal amount due on the note would increase by the same percentage that the price of gold increased. The note was due and payable on December 31, 2010. In addition, Mr. Kanakis granted Mr. Sens an option to purchase 500,000 shares (the “Option Shares”) of the Company’s common stock owned by Mr. Kanakis for $51,000.VALUE

OnASC ~~January~~825-10 ~~22,~~defines ~~2011,~~fair ~~the~~value ~~Company,~~as ~~Mr.~~the ~~Kanakis~~price ~~and~~that ~~Mr.~~would ~~Sens~~be ~~entered~~received ~~into~~from selling an ~~agreement,~~asset ~~under~~or ~~which~~paid ~~Mr. Kanakis agreed~~ to ~~convert~~transfer ~~the~~a ~~January~~liability ~~15,~~in ~~2010~~an ~~note~~orderly ~~and~~transaction ~~unpaid~~between ~~accrued~~market ~~interest~~participants ~~and~~at ~~fees into 650,000 shares of~~ the ~~Company’s~~measurement ~~common stock (the “Conversion Shares”)~~date. ~~Mr.~~ ~~Kanakis~~When ~~has~~determining the ~~right~~fair tovalue ~~put~~measurements ~~the~~for ~~Conversion~~assets ~~Shares~~and ~~back~~liabilities torequired ~~the~~or ~~Company~~permitted ~~at any time from March 31, 2011~~ to ~~June~~be ~~30,~~recorded ~~2011~~at infair ~~the event he does not receive total proceeds of $186~~value,~~500~~ ~~from~~ the ~~sale~~Company ofconsiders the ~~Conversion~~principal ~~Shares~~or ~~and~~most ~~the~~advantageous ~~Option~~market ~~Shares,~~ in which ~~event~~it ~~the~~would ~~put~~transact ~~price~~and ~~for~~considers ~~the~~assumptions ~~Conversion~~that ~~Shares~~market ~~shall~~participants bewould ~~the~~use ~~January~~when ~~15,~~pricing ~~2010 note. Mr. Kanakis had sold 100,000 of~~ the ~~Option~~asset ~~Shares~~or ~~for $12~~liability,~~500,~~ ~~and~~such ~~the parties agreed~~ as ~~part~~inherent ofrisk, ~~the~~transfer ~~settlement that he could sell the remaining Option Shares~~restrictions, ~~subject~~and torisk ~~a limit price~~ of $0nonperformance.16 ~~per~~ASC ~~share. Mr.~~825-10 ~~Kanakis~~establishes ~~has~~ a ~~potential~~fair ~~buyer~~value tohierarchy ~~purchase~~that ~~the~~requires ~~Conversion~~an ~~Shares~~entity ~~for~~to ~~$110,000,~~maximize ~~and if Mr. Kanakis is not paid by~~ the ~~buyer~~use of ~~the~~observable ~~Conversion~~inputs ~~Shares, he has the right to put his rights~~ and ~~claims~~minimize ~~against~~ the ~~buyer~~use toof ~~the~~unobservable ~~Company~~inputs inwhen ~~lieu~~measuring offair ~~the Conversion Shares~~value. If ~~Mr.~~ASC ~~Kanakis~~825-10 isestablishes ~~able~~three tolevels ~~sell~~of ~~the~~inputs ~~remaining~~that ~~Option Shares, but does not sell or receive payment for the Conversion Shares, then Mr. Kanakis~~ may ~~put the Conversion Shares back to the Company for the January 15, 2010 note, in which event the Company shall~~ be ~~entitled~~used to ameasure ~~credit~~fair ~~of $15,000 on the note. To date the 650,000 shares of common stock have not been issued to Mr. Kanakis.~~value:

A) Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Prices may be indicated by pricing guides, sale transactions, market trades, or other sources;

B) Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost); and

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE 910 –— ~~SUBSEQUENT~~FAIR ~~EVENTS~~VALUE (continued)

~~None~~C) ofIncome ~~the~~approach—Uses ~~transactions~~valuation ~~contemplated~~techniques byto ~~the~~convert ~~January~~future ~~22,~~amounts ~~2011,~~to ~~were~~a ~~completed. On~~single ~~June~~present ~~29,~~amount ~~2011,~~based ~~the~~on ~~Company,~~current ~~Mr.~~market ~~Kanakis~~expectations ~~and~~about ~~Mr.~~the ~~Sens~~future ~~entered~~amounts ~~into~~(includes apresent ~~modification~~value ~~to the January 22~~techniques, ~~2011~~and ~~agreement. Under~~option-pricing ~~the modification, Mr~~models). ~~Kanakis~~Net ~~agreed~~present ~~that~~value heis ~~would sell the remaining Option Shares to~~ an ~~investor~~income ~~identified~~approach bywhere ~~Mr.~~a ~~Sens~~stream ~~for~~of ~~$0.18~~expected ~~per~~cash ~~share,~~flows oris ~~$72,000~~discounted ~~by August 15, 2011; provided that he could sell any Option Shares on the open market~~ at ~~a price greater than $0.18 per share prior to such investor purchasing the Option Shares. The parties also agreed that Mr. Kanakis would sell the Conversion Shares to~~ an ~~investor~~appropriate ~~identified~~market byinterest Mrrate. ~~Sens for $110,000 by July 31, 2011.~~

~~Charter~~The ~~House~~Company adopted the provisions of ASC 825-10 prospectively effective as of the beginning of its Fiscal 2008. For financial assets and liabilities included within the scope of ASC 825-10, ~~LLC~~the ~~Loan~~Company ~~Transactions~~will be required to adopt the provisions of ASC 825-10 prospectively as of the beginning of Fiscal 2009. The adoption of ASC 825-10 did not have a material impact on our consolidated financial position or results of operations.

AsThe ~~described~~carrying invalue ~~Note~~of 5, the Company’s ~~had~~cash ~~total outstanding notes due to Charter House, LLC in the aggregate amount of $418,000 ($283,000~~ and ~~$135,000~~cash ~~notes) as of September 30~~equivalents, ~~2009~~accounts ~~and December 31~~receivable, ~~2008. On~~accounts ~~May 10~~payable, ~~2010,~~short-term ~~the~~borrowings ~~Company~~(including ~~and~~convertible ~~Charter~~notes ~~House~~payable), ~~LLC entered into a forbearance agreement with regards to the outstanding liability. The unpaid accrued interest, penalty~~ and ~~fees~~other ~~were~~current ~~partially~~assets ~~repaid by the Company pursuant to the agreement,~~ and ~~Charter~~liabilities ~~House,~~approximate ~~LLC~~fair ~~agreed~~value ~~not~~because to exercise any remedies under the note until December 31, 2010. The interest rate was agreed to be 21% per annum. The Company also prepaid interest that would accrue under the note from May 10, 2010 to December 31, 2010 in the amount of ~~$51,478. The~~their ~~forbearance~~short-term ~~agreement defined the default rate of interest as 24% per annum, and provided that a default on a note to Kent Carr in the amount of $750,000 (see below) would constitute a default under the note~~maturity. If the Company fails to make payment in full of the amount due on or before December 31, 2010, a late charge of 10% of such payment will be added to the amount due. The Company did not repay the loan as of December 31, 2010 and is currently in default.

~~Pierre~~Items ~~Palian~~recorded ~~Loan~~or ~~Transactions~~measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of debt derivative liabilities.

As described in Note 5, the Company had an outstanding note to Pierre Palian in the amount of $375,000 as of September 30, 2009 and December 31, 2008. The note bore interest at 15% per annum, and matured on October 13, 2008. The note was secured a lien on certain real estate of the Company in Augusta County, Virginia. The note was guaranteed by Mr. Sens. On May 5, 2010, the Company and Mr. Palian entered into a forbearance agreement with regards to the outstanding liability. The unpaid accrued interest, penalty and fees were partially repaid by the Company pursuant to the agreement, and Mr. Palian agreed not to exercise any remedies under the note until December 31, 2010, and increased the interest rate under the note to 21% per annum. The Company also prepaid interest that would accrue under the note from May 10, 2010 to December 31, 2010 in the amount of $48,972. The forbearance agreement also increased the default rate of interest to 24% per annum, and provided that a default on a note to Kent Carr in the amount of $750,000 (see below) would constitute a default under the note. The Company did not repay the loan as of December 31, 2010 and is currently in default.

	Quoted Prices in Active Markets for Identical Instruments Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3			Assets at fair Value
Liabilities:
Convertible debt derivative liability	$	-	$	-	$	(14,900	)	$	(14,900	)
Total	$	-	$	-	$	(14,900	)	$	(14,900	)

~~Kent~~The ~~Carr~~following ~~Loan~~table ~~Transaction~~provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of March 31, 2011:

On May 5, 2010, the Company issued a note to Kent Carr in the amount of $750,000 secured by a first lien on certain real estate property of the Company in Augusta County, Virginia. The note bore interest at 12% per annum and is due on November 1, 2011. The proceeds of the note were used to partially repay indebtedness to Charter House, LLC and Pierre Palian, and miscellaneous fees and charges, and resulted in net proceeds to the Company of $118,000. As part of the transaction, Charter House, LLC and Mr. Palian subordinated their first mortgage on certain property of the Company in Augusta County, Virginia to the mortgage lien of Mr. Carr.

	Convertible Debt Derivative
Balance, December 31, 2010	$	950
Total gains:
Initial fair value of debt derivative at note issuance
Mark-to-market at March 31, 2011:
- Debt Derivative		13,950
Balance, March 31, 2011	$	14,900

Net loss for the period included in earnings relating to the liabilities held at March 31, 2011	$	(13,950	)

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2009~~2011

(UNAUDITED)

NOTE 911- – SUBSEQUENT EVENTS ~~(continued)~~

~~Miscellaneous~~Theodore ~~Note~~J. orKanakis ~~Finance~~Loan Transactions

On ~~November~~January 522, ~~2009~~2011, the Company, ~~issued~~Mr. aKanakis and Mr. Sens entered into an agreement, under which Mr. Kanakis agreed to convert the January 15, 2010 note and unpaid accrued interest and fees into 650,000 shares of the Company’s common stock (the “Conversion Shares”). Mr. Kanakis has the right to put the Conversion Shares back to the Company at any time from March 31, 2011 to June 30, 2011 in the event he does not receive total proceeds of $7186,500 from the sale of the Conversion Shares and the Option Shares, in which event the put price for the Conversion Shares shall be the January 15, 2010 note. Mr. ~~payable~~Kanakis ~~with~~had 6%sold 100,000 of the Option Shares for $12,500, and the parties agreed as part of the settlement that he could sell the remaining Option Shares, subject to a limit price of $0.16 per ~~annum~~share. Mr. ~~interest~~Kanakis has a potential buyer to purchase the Conversion Shares for $110,000, ~~due~~and if Mr. Kanakis is not paid by the buyer of the Conversion Shares, he has the right to put his rights and claims against the buyer to the Company in lieu of the Conversion Shares. If Mr. Kanakis is able to sell the remaining Option Shares, but does not sell or receive payment for the Conversion Shares, then Mr. Kanakis may put the Conversion Shares back to the Company for the January 15, 2010 note, in which event the Company shall be entitled to a credit of $15,000 on ~~demand~~the note. To date the 650,000 ~~unsecured~~shares of common stock have not been issued to Mr. Kanakis.

~~Loans~~None of the transactions contemplated by the January 22, 2011 agreement were completed. On June 29, 2011, the Company, Mr. Kanakis and Mr. Sens entered into a modification to ~~Officer/Significant~~the ~~shareholder~~January 22, 2011 agreement. Under the modification, Mr. Kanakis agreed that he would sell the remaining Option Shares to an investor identified by Mr. Sens for $0.18 per share, or $72,000 by August 15, 2011; provided that he could sell any Option Shares on the open market at a price greater than $0.18 per share prior to such investor purchasing the Option Shares. The parties also agreed that Mr. Kanakis would sell the Conversion Shares to an investor identified by Mr. Sens for $110,000 by July 31, 2011. No shares were sold under the June 29, 2011 modification agreement and that agreement has since expired.

From time to time, the President of the Company, Joel Sens, advanced funds to the Company for working capital purposes. As described in Note 8, the total balance due to Mr. Sens was paid in full as of December 31, 2008 and the total payments the Company remitted exceeded the total balance due to Mr. Sens. Total overpayment to Mr. Sens amounted to $666,947 as of December 31, 2009. The excess payment made to Mr. Sens was accounted for as a nonreciprocal transfer to Mr. Sens and, accordingly, a direct reduction of additional paid-in capital. The total overpayment was reduced in 2010 by approximately $120,000, representing salary (excluding tax withholdings) due Mr. Sens for the year ended December 31, 2010, $105,000 in January 2010 for the value of a coin collection conveyed to a lender of the Company in partial settlement of the loan, and the fair value of 791,000 shares of common stock Mr. Sens personally owned and assigned to another lender as partial settlement of the loan to the Company.

Issuance of Common Stock

As described above, in December 2010 the Company issued 375,000 shares of common stock to Amicus Funding Inc. in connection with the settlement agreement entered into on November 10, 2010, and issued 375,000 shares of common stock to American Marketing and Capital, Inc. pursuant to the settlement agreement dated November 9, 2010.

Land Purchase Options

As described in Note 4, the Company’s wholly owned subsidiary Knox County Minerals, LLC (“Knox Minerals”) entered into an Agreement Regarding Option (the “Assignment Agreement”) in May 2008 and had several Amendments to the Assignment Agreement. Knox Minerals ultimately did not close on Knox Land by the deadline therefore, and the Assignment Agreement lapsed upon the expiration of the Sixth Amendment in the first quarter of the fiscal year 2009.

On March 25, 2010, Knox Minerals entered into a Real Estate Purchase Option (the “2010 Option”) with the Option Holders, under which Knox Minerals agreed to pay the Option Holders $100,000 for an option to purchase the oil and gas (including coal bed methane) rights under the Knox Land for an aggregate price of $1,575,000. The option period was 120 days, except that Knox Minerals had the right to extend the closing date for four additional 30 day periods upon payment of $25,000 for each period. Next Generation Media Corp., n/k/a Next Generation Energy Corp. (“NGEC”), loaned the Company $125,000, of which $100,000 used by Knox Minerals to make the initial option payment to the Option Holders and the remaining $25,000 was used to pay a brokerage commission due to a broker who arranged the 2010 Option. NGEC’s loan is evidenced by a promissory note dated March 25, 2010 in the principal amount of $125,000 that is payable in full with interest at 6% per annum twenty-four months after the date of the note.

SEAWRIGHT HOLDINGS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(UNAUDITED)

NOTE 9 – SUBSEQUENT EVENTS (continued)

On April 16, 2010, Knox Minerals entered into an Assignment and Assumption Agreement with NGEC, under which Knox Minerals assigned all of its right, title and interest under the 2010 Option to NGEC. Under the Assignment and Assumption Agreement, NGEC paid Knox Minerals $600,000 in the form of a promissory note payable in full in sixty months with interest at 6% per annum. NGEC also agreed to grant Knox Minerals a 9% overriding royalty in the property, and to convey to Knox Minerals one of the parcels covered by the option. NGEC made one extension payment to extend the closing date under the 2010 Option, but did not close and the 2010 Option lapsed by its terms.

Subsequent to the assignment and before the expiration of the 2010 Option to NGEC, the President of the Company, Joel Sens, became a significant shareholder and a director of NGEC.

The Company has not netted the $125,000 loan from NGEC against NGEC’s $600,000 promissory note payable to Knox Minerals because the obligations are not mutual obligations that are subject to offset under the law. A note payable of $125,000 due to NGEC was accounted for in March 2010, however, the Company did not recognize a gain or a note receivable for the $600,000 promissory note due from NGEC, based on the assessment that NGEC had limited ability to repay this note and that collection could not be reasonably assured at that time the agreement was entered into. The Company will account for future amounts, if any, that it collects from NGEC as other income only at the time such collection occurs.

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

Disclosure Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Forward Looking Statements”). All statements other than statements of historical fact included in this report are Forward Looking Statements. In the normal course of its business, the Company, in an effort to help keep its shareholders and the public informed about the Company’s operations, may from time-to-time issue certain statements, either in writing or orally, that contain or may contain Forward-Looking Statements. Although the Company believes that the expectations reflected in such Forward Looking Statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, past and possible future, of acquisitions and projected or anticipated benefits from acquisitions made by or to be made by the Company, or projections involving anticipated revenues, earnings, levels of capital expenditures or other aspects of operating results. All phases of the Company operations are subject to a number of uncertainties, risks and other influences, many of which are outside the control of the Company and any one of which, or a combination of which, could materially affect the results of the Company’s proposed operations and whether Forward Looking Statements made by the Company ultimately prove to be accurate. Such important factors (“Important Factors”) and other factors could cause actual results to differ materially from the Company’s expectations are disclosed in this report. All prior and subsequent written and oral Forward Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from the Company’s expectations as set forth in any Forward Looking Statement made by or on behalf of the Company.

Plan of Operation

In 2003, we purchased property containing a spring located in Mt. Sidney, Virginia in the Shenandoah Valley with the intention of developing a spring water distribution business. The spring has a flow in excess of 1,000,000 gallons of water daily.

We chose to develop and acquire packaging for selling our water under the brand names Seawright Springs and Quibell. We developed two proprietary Polyethylene Terephthalate, or PET, bottles in a 16.9 ounce size and a 33.8 ounce size. In addition, in June 2005 we acquired from Quibell glass bottle designs for various sized bottles (including 237 ml, 385 ml, 750 ml and 1 liter sizes) as well as labels for various sized sparkling water bottles, spring water bottles and tea bottles (including 237 ml, 385 ml, 750 ml, 1 liter, 1.5 liter and 16.9 ounce bottles).

We ultimately determined that we did not have the capital resources to market and distribute our bottled water as a retail brand, and therefore we discontinued that business strategy. Our business strategy is now focused on negotiating bulk sales of our water to other bottlers, or to municipal, commercial or agricultural users. The fair value of the intangible assets acquired from Quibwell was impaired and reduced to $0 as of December 31, 2007.

We do not anticipate that our business will require substantial additional capital to the extent it involves the sale of water in bulk from our existing property, because we expect that such sales will be handled by our existing officer. However, we are also considering complimentary acquisitions of other natural resources properties, and will need to raise new capital to complete any acquisitions.

In 2008, we decided to enter the business of owning oil and gas properties, and procured an option on certain properties in Knox County, Kentucky. However, we were unable to close on the purchase and the option lapsed in 2009. In 2010, we procured a new option on the oil and gas rights underlying the same properties, and shortly thereafter assigned the option to a third party. Subsequent to the assignment of the option in 2010, the President of the Company became a significant shareholder and a director of that entity the option was assigned to. This 2010 option also lapsed later in 2010.

1716

Comparison of Financial Results

Three ~~and Nine~~ months ended ~~June~~March 3031, ~~2009~~2011 and ~~2008~~2010

Revenues

During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2009,~~2011 ~~we generated $0~~ and ~~$0 of revenue~~2010, ~~respectively,~~we ~~from~~generated no ~~the Mt. Sidney spring from on-site sales, as compared to $704 and $4,403 of~~ revenues ~~for the same periods in fiscal year 2008~~. We have discontinued trying to market our bottled water as a retail brand, and have shifted our focus to negotiating bulk sales of our water to other bottlers, or to municipal, commercial or agricultural users. Because of the change in our business strategy, we do not believe that past revenues are reflective of our future revenues.

Costs and Expenses

From our inception through ~~September~~March 3031, ~~2009~~2011, we have incurred net losses of $89,~~388~~214,~~621~~067. These losses were associated principally with maintenance and engineering costs associated with the spring site, including testing of water quality, stock issuances to our founders, legal, consulting and accounting fees and costs in connection with the development of our business plan, market research, interest and financing expenses, and the preparation of our registration statements.

We incurred operating expenses of $61103,~~167~~240 and $~~381~~117,~~262~~294, respectively, during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2009~~2011 ~~as compared to expenses of $268,740~~ and ~~$574~~2010,~~115,~~ respectively~~, during the three and nine months ended September 30, 2008~~. Expenses for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2009~~2011 and ~~2008~~2010 are composed principally of salary, legal and accounting fees, and consulting fees. The Company’s operations were further reduced in the three and nine months ended September 30, 2009 as compared to the same periods in the fiscal year 2008 as a result of our change in strategy with respect to sales of water from our properties. The operating expenses for the nine months ended September 30, 2009 included $115,500 of wrote off of investment in a land purchase option upon expiration in the first quarter of the fiscal year 2009.

We incurred total other expenses of $~~148~~188,~~994~~465 and $~~407~~213,~~151~~763, respectively, for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2009,~~2011 ~~as compared to income of $1,291,018~~ and ~~$1,039,995, respectively, for the three and nine months ended September 30, 2008~~2010. Other expense in both periods was mainly attributable to interest and financing expense on borrowed funds. ~~However, in the three and none months ended September 30, 2008, we generated other income of $1,448,056 from the sale of certain real estate property.~~

During the ~~nine months ended September 30, 2009 and 2008, we incurred net income (loss) of ($788,413) and $470,283, respectively. During the~~ three ~~months~~ ended ~~September~~March 3031, ~~2009~~2011 and ~~2008~~2010, we incurred net ~~income~~losses ~~(loss)~~ of ($~~210~~291,~~161)~~705 and $1331,~~022~~057,~~982,~~ respectively.

Liquidity and Capital Resources

The following table sets forth the major sources and uses of cash for the ~~nine~~three months ended ~~September~~March 3031, ~~2009~~2011 and ~~2008~~2010:

	Nine months ended September 30,
	Three months ended March 31,
	2009			2008
	2011			2010
Net cash used in operating activities	$	(~~150~~61,~~467~~370	)	$	(~~705~~60,~~216~~059	)
Net cash provided by investing activities		-			2,289,520
Net cash (used in) investing activities		-			(100,000	)
Net cash provided by (used in) financing activities		~~150~~61,~~467~~370			(1160,~~584,169~~0519	)
Net increase in cash and cash equivalents	$	-		$	~~135~~-

As of ~~September~~March 3031, ~~2009~~2011, we had working capital deficit (total current liabilities in excess of total current assets) of ($23,~~695~~001,~~820~~099), an available cash balance of $~~580~~Nil, an accounts payable and accrued liabilities balance of $~~755~~761,~~731~~173, ~~a line of credit balance of $700,427,~~ notes payable and convertible notes payable of $12,~~191~~049,~~611~~943, and other current liabilities of $46200,~~092~~000.

1817

While we have raised the capital necessary to meet our working capital and financing needs in the past, additional financing is required in order to meet our current and projected cash flow deficits from operations and development. Funds will be needed to meet certain of our obligations that are secured by our property in Mt. Sydney, Virginia, and to fund general and administrative expenses. We have been working on business development in recent years to fund our cash needs from the bulk sale of our spring water, but if we are not able to negotiate a bulk sales agreement in a timely fashion, we will need to raise new capital to fund our cash needs.

If we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources on terms acceptable to us, this could have a material adverse effect on our business, results of operations, liquidity and financial condition.

Going Concern

Our financial statements have been presented on the basis that we continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, we have significant recurring losses, and have minimal revenues at this time. These factors create an uncertainty about our ability to continue as a going concern. Management is devoting substantially all of its efforts to developing its products and services and there can be no assurance that the Company's efforts will be successful. However, the planned principal operations have not commenced and no assurance can be given that management's actions will result in profitable operations or the resolution of its liquidity problems. The Company is also pursuing additional debt or equity financing through discussions with private investors. There can be no assurance that the Company will be successful in its effort to secure additional financing. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 1 of notes to our audited financial statements for the year ended December 31, ~~2008~~2010, which are included in our Annual Report on Form 10-K filed onwith ~~June~~the ~~15, 2011~~SEC. Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our consolidated financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.

We believe that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

Recent accounting pronouncements

Recent accounting pronouncements issued by the FASB and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Because the Company is a smaller reporting company, it is not required to provide the information called for by this Item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Joel Sens, our chief executive officer and chief financial officer, is responsible for establishing and maintaining our disclosure controls and procedures. Disclosure controls and procedures means controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in those reports is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Mr. Sens evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of ~~September~~March 3031, ~~2009~~2011. Based on that evaluation and because of the Company’s limited resources and limited number of employees, it is concluded that our disclosure controls and procedures were ineffective as of ~~September~~March 3031, ~~2009~~2011.

Changes in internal controls

There were no changes in our internal controls over financial reporting that occurred during the quarter ended ~~September~~March 3031, ~~2009~~2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION.

ITEM 1. LEGAL PROCEEDINGS.

~~In 2009, Amicus Funding, LLC (“Amicus”) filed a lawsuit against the Company and Joel Sens in the Circuit Court for Arlington County, Virginia~~None. Amicus asserted claims against the Company under two promissory notes for $50,000 each which Amicus had acquired from the original lenders. Amicus asserted claims against Mr. Sens based upon two agreements under which Amicus alleged Mr. Sens defaulted on commitments to purchase shares of the Company’s common stock from Amicus. The lawsuit was dismissed in February 2009 as part of a settlement under which the Company paid Amicus $12,000, and the Company executed a new note to Amicus for $112,000 and Mr. Sens executed a note to Amicus for $85,000.

On May 9, 2009, Amicus filed another lawsuit against the Company and Mr. Sens in the Circuit Court for Arlington County, Virginia to recover amounts due under the promissory notes issued pursuant to the February 2009 settlement agreement. The second lawsuit was dismissed in November 2009 pursuant to a settlement agreement under which the Company and Mr. Sens jointly agreed to pay Amicus $140,000 on or before January 29, 2010, and to secure the obligation by a subordinate lien on certain real property owned by the Company in Augusta County, Virginia.19

On August 10, 2009, Theodore Kanakis filed a lawsuit against the Company in the Circuit Court for Arlington County, Virginia to recover a loan in the original principal amount of $300,000 that he made to the Company in 2007. The lawsuit was dismissed in January 2010 as part of a settlement under which Mr. Sens conveyed a coin collection that both parties valued at $105,000 to Mr. Kanakis as partial payment of the amount owed Mr. Kanakis, and the Company issued a note to Mr. Kanakis for $150,000 in settlement of the remainder of the liability.

ITEM 1A. RISK FACTORS.

Not applicable.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

At ~~September~~March 3031, ~~2009~~2011, the Company was in default under certain loan agreements as described in Note 5 to its unaudited consolidated financial statements.

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Reference is made to the Index to Exhibits following the signature page to this report for a list of all exhibits filed as part of this report.

31	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
32	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

2120

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SEAWRIGHT HOLDINGS, INC.
Date: July 28, 2011	/s/ Joel Sens
Date: October 7, 2011	/s/ Joel Sens
	By: Joel Sens, Chief Executive Officer (principal executive officer, and principal financial and accounting officer)

2221

EXHIBIT INDEX

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of Pre-Settlement Funding Corporation.(1)
3.2	Certificate of Designation of Series A Convertible Preferred Shares of Seawright Holdings, Inc.(1)
3.3	Amended and Restated By-laws of Seawright Holdings, Inc.(1)
4.1	Form of Common Stock Certificate.(2)
10.1	Asset Purchase Agreement dated as of June 27, 2005, by and between Seawright Holdings, Inc. and QuiBell Partners, LLC(3)
10.2	Deed of Trust Note dated June 8, 2006, by and between Seawright Springs, Inc. and Charter House, LLC. (4)
10.3	Modification Agreement dated October 5, 2006 to the Deed of Trust Note dated June 8, 2006, by and between the Seawright Springs, Inc., Palma Collins as Trustee and Charter House, LLC. (5)
10.4	Forbearance Agreement among Seawright Springs, LLC, Seawright Holdings, Inc. and Charter House, LLC dated May 5, 2010 (6)
10.5	Deed of Trust Note executed by Seawright Holdings, Inc. and Seawright Springs, LLC to Pierre Palian in the original principal amount of $375,000 dated April 14, 2008 (6)
10.6	Deed of Trust executed by Seawright Holdings, Inc. and Seawright Springs, LLC in favor of Pierre Palian dated April 14, 2008 (6)
10.7	Forbearance Agreement among Seawright Springs, LLC, Seawright Holdings, Inc. and Pierre Palian dated May 5, 2010 (6)
10.8	Note executed by Seawright Springs, LLC to Kent Carr in the original principal amount of $750,000 dated May 5, 2010 (6)
10.9	Deed of Trust executed by Seawright Springs, LLC in favor of Kent Carr dated May 5, 2010 (6)
10.10	Confessed Judgment Promissory Note executed by Seawright Holdings, Inc. to Theodore J. Kanakis in the original principal amount of $150,000 dated January 15, 2010 (6)
10.11	Deed of Trust executed by Seawright Springs, LLC in favor of Theodore J. Kanakis dated January 15, 2010 (6)
10.12	Settlement Agreement between Seawright Holdings, LLC, Joel Sens and Theodore J. Kanakis dated January 22, 2011 (6)
10.13	6% Convertible Promissory Note executed by Seawright Holdings, Inc. to American Marketing and Capital, Inc. in the original principal amount of $440,000 dated May 5, 2010 (6)
10.14	Settlement Agreement and Mutual Release of Claims between Seawright Holdings, Inc., Joel Sens and Amicus Funding, Inc. dated November 9, 2009 (6)
10.15	Letter Agreement between Seawright Holdings, Inc. and American Marketing and Capital, Inc. dated November 9, 2010 (6)
10.16	Letter Agreement between Seawright Holdings, Inc. and Amicus Funding, Inc. dated November 10, 2010 (6)
31*	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
32*	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

____________________________

* Filed herewith.

(1) Incorporated by reference from Form 8-K as filed with the SEC on October 24, 2003.

(2) Incorporated by reference from exhibit 4(i) of Form 10-QSB as filed with the SEC on May 23, 2005.

(3) Incorporated by reference from Form 8-K as filed with the SEC on June 30, 2005.

(4) Incorporated by reference from Registration Statement on Form SB-2 as filed with the SEC on July 17, 2006.

(5)	Incorporated by reference from Form 8-K as filed with the SEC on October 11, 2006.
(6)	Incorporated by reference from Form 10-K for the fiscal year ended December 31, 2007 as filed with the SEC on June 14, 2011.

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