Dear Shareholders of Seldovia Native Association, Inc.;

It is my privilege to report to you that in the year 2010 your Corporation ended the year with positive earnings that were achieved during a period of significant economic challenges posed by  the difficult business climate that we operate in.  Despite these       challenges we also have been fortunate to have new opportunities emerge as we continue to work to grow the Corporation and to increase Shareholder value.

Our Dimond Center Hotel operations reported a positive outcome as the economic        environment has seen a pickup in travel that was largely in the doldrums until this year.  We have implemented a new management team at the hotel that has successfully gained new market-share, especially in the traditionally slow winter season, by focusing on

Alaskan travelers that provide consistent year around business.The Hotel continues to maintain its high standard of quality and service, all of which are benchmarks that help us to boost occupancy.  The outlook for the coming year is healthy with increased advanced bookings that have surpassed previous years.  In the coming year we will work to revamp our public areas, especially the dining and lounge components so that the property remains competitive in the Anchorage Market and provides a higher level of customer service to our guests.

Our government contracting operations under Red Mountain, LLC enjoyed unprecedented success as we were finally in a position after many years to garner several construction contracts at military bases in Central California.  Red Mountain LLC was the largest contributor in 2010 out of all of our operating entities to the Company’s overall bottom line.  Going forward we are challenged by many factors that will impact our contracting business, namely the pace of the nation’s economic recovery, political efforts to diminish the special status that Alaska Native Corporation’s currently enjoy under the US Small Business Administration’s 8(a) program, and the pending transition that Red Mountain LLC must make as it moves to    graduating from the 8(a) program.  Quality has been our guiding principal in all of Red Mountains’ operations as we aim to deliver a completed product to the government that meets their requirements and allows us to make a fair profit that translates directly into benefits to our Shareholders.   Our focus toward the future will entail looking at other types of    business operations that take advantage of the new economy that is emerging globally in such arenas as renewable energy and environmental stewardship.

This past year we made the difficult decision to discontinue our Main Street Market operations in our home community of Seldovia.  This decision was not made lightly, however because of ongoing losses at the market management along with your Board of Directors determined that the Market was no longer a sustainable operation.  In the coming year we will   analyze our options for the Main Street Market  property and determine a plan that provides for the highest and best use of that holding.

Seldovia Native Association continues to pursue a resolution to our 12(a) and (b) lands matter.  We along with other Corporations in the CIRI Region continue to meet and discuss ways that will finally gain our entitlement to these important lands located on the West side of Cook Inlet.  Our overall lands management program continues to develop and in the past year we have invested in a lands mapping and data management system that will allow us to be more efficient in our management of our largest asset—the land that our ancestors fought hard for.

As part of our commitment to keep our shareholders informed of our activities we completed a revamp of our website www.snai.com.  Please look for more features to be added to this site that will give shareholders more up to date real time information about the Company and its activities.  Looking forward there is much work to be done; we continue to face the challenges of a tough economy by examining daily our ongoing operations and cost structure with a focus on future growth.  By working together as Shareholders, Directors and Management it is our goal to capture new opportunities for the continued growth of Seldovia Native Association, Inc. both for the short term and for the future.  Please feel free to contact us at anytime with any questions or concerns you may have.

Leo Barlow, Chief Executive Officer