KavilCo Newsletter – Spring 2024

By Kavilco Editor | April 15, 2024

You can download the complete newsletter (pdf)

President’s Report

by Jeane Breinig, President

Jeane BreinigAs your newly elected President, it is my honor and pleasure to serve you. I follow in the footsteps of two fine leaders, Louis L. Jones Sr., and Louis A. Thompson. Both men contributed significantly to Kavilco’s successful 50-year track record. My goals as your President are simple: to stay the course on what has worked well and to pursue new economic opportunities.

Pursuing economic opportunities beyond stocks and bonds is tricky because we are a SEC Registered Investment Company. We face treacherous tax consequences if we are not thoughtful and careful. But Kavilco has always been a little bit different than other Alaska Native corporations, to our benefit, and at some point, that may very well play to our advantage again.

I return to Kasaan in April. Having spent my childhood and many recent summers there, it is an easy stretch to return with new responsibilities and new goals. Kasaan is a special, magical place and it gives me great joy to know I am on the same land where our ancestors and relatives built their lives. Kavilco exists against tremendous odds because our people had the vision and foresight to fight for Kasaan’s inclusion in the Alaska Native Claims Settlement Act (ANSCA). Many did not live to enjoy the benefits we now do. Kasaan is place to which shareholders can always return and call home. I hope many of you come to Kasaan and reconnect with the rich history of our village.

Dividend Distribution

Super Moon at the Beach - Kasaan AKWe are pleased to announce that on March 1, 2024 the Kavilco Board of Directors declared a cash dividend of $17.30 per share (long term capital gains are unknown at this time.) This dividend was paid to shareholder of record as of March 1, 2024. The dividend was payable on March 7, 2024 and reflects un- distributed earnings from 2023.

A Registered Investment Company (RIC) must distribute at least 90% of their earnings to avoid being subject to a 21% federal income tax rate. For shareholders with 100 shares your dividend is $1,730.00. The Spring dividend completes the distribution of earnings for 2023; combined with the Fall dividend the total earnings distribution for 2023 is $79.30 per share.

If Kavilco was not a Registered Investment Company and had to pay income tax your Spring dividend after tax would have been $1,384.00. You receive an additional $346.00 because Kavilco does not have to pay federal income tax.

Janelle Hyatt, Kavilco’s Newest Director

Ha’waa for the excellent open-board seat applications. We had several high caliber candidates in the pool. This is good news because it tells us we have many engaged, successful shareholders offering their talents to our corporation.

After careful deliberation, the board selected Janelle S. Hyatt. Her professional and life accomplishments are impressive.

Janelle’s current position is Nurse Practitioner (NP) in a pain management clinic in Richland, Washington. To earn the NP credential, she received her Master of Science in Nursing from Simmons College, Boston, 2018, after earning a Bachelor of Science in Nursing, Magna Cum Laude, 2014, and an Associate of Applied Science, 2011, in Alaska. Janelle completed her practicums in Anchorage at Southcentral Foundation, Jordon Creek Health Center, and Benteh Nutah Native Primary Clinic. In 2013, she won the Practice Excellence Award Program (PEAP) honor from Alaska Native Medical Center. Janelle is a licensed NP in Alaska, Oregon, and Washington.

Nurse Practitioner is Janelle’s second career and second degree. After graduating from Ketchikan HS in 1985, she earned a Bachelor of Arts in Communication from Washington State University. Janelle then spent 15+ years in technology support in San Francisco, serving companies such as Microsoft, Walmart, and many dot.com startups.

Between careers, Janelle traveled the world backpacking across South America, Europe, Thailand, Australia, and New Zealand before returning to Alaska to pursue her dreams in the medical field.

Janelle’s track record includes leadership and prior board service. As past President of San Francisco Triathlon Club, Janelle is herself a noted triathlete (swimming, cycling, running) competing successfully in multiple IronMan races. She now serves as Secretary and board member of Columbia River Nurse Practitioner Association. Since 2000 Janelle has played an important role fundraising for KHHF through her donations and volunteer contributions.

Significantly, Janelle is our first “second generation” (inherited or gifted shares) board member. Her qualifications, and those of other top-notch submissions this year, bodes well for Kavilco’s future.

Please join us in welcoming Janelle S. Hyatt to the Kavilco board.

Shareholder Passages …

Remembering Kathy Davis Young.jpjg

RIP Shareholder Mary Kathleen (Kathy) Davis Young
L to R Melanie Young, Kathleen Young, and Marie Miller

Economy & Portfolio, by Scott Burns, CFO

Scott Burns - CFOKavilco’s portfolio strategy is based on an inflationary environment. The latest Consumer Price Index (CPI) shows that inflation increased 3.1% on an annualized basis, far more than the 2% target range of the Federal Reserve Board (Fed). In the next six months the Fed is unlikely to decrease interest rates because consumer prices are still rising, the economy continues to expand at a solid pace with Gross Domestic Product increasing 3.35% in the final quarter of 2023. Also, there were strong job gains in January. In other words, the fed’s actions have not resulted in a decrease in inflation approaching the targeted 2% range.

The financial markets are discounting at least two reductions in the Federal Fund Rate even though inflation has not been tamed. This may have to do with the politization of the Fed reducing interest rates to aid the current administration during the election year.

On the portfolio front, one investment service the company subscribes to is the Aden Forecast. Aden recommends that equity investors should transition from stocks to treasuries to preserve capital with higher yields than most stocks. This coincides with the strategy approved by the board of directors at the November 2022 board meeting. The investment service we used was Bank Credit Analysis. The most recent edition still recommends this strategy.

Financial report decorationTreasury market yields have moved notably lower. This was a reaction to the continued moderation in price growth and that the Fed is done raising rates. However, a senior Federal Reserve official continues to say that short-term rates need to stay high for an extended period to tame inflation. This is good news for our Treasury Bill strategy

Kavilco’s portfolio strategy is based on an inflationary environment. The latest Consumer Price Index (CPI) shows that inflation increased 3.1% on an annualized basis, far more than the 2% target range of the Federal Reserve Board (Fed). In the next six months the Fed is unlikely to decrease interest rates because consumer prices providing the Fed officials that support this view are not out voted by other members of the Fed.

Reviewing various treasury and corporate yields, the 6-month yield (the target investment maturity) is still outperforming various investments grade corporate and treasury bond interest rates and stock dividend yields and, as an additional bonus, is risk free.

The portfolio has $21 million of par t-bills. The maturities range from April 25, 2024 to September 12, 2024.

All reinvestment of matured Bills and proceeds from the sale of equities have been at a higher than 5.11% interest rate.

 

New Director, Janelle S. Hyatt

By Kavilco Editor | March 22, 2024

Janelle Hyatt in KasaanHa’waa for the excellent open-board seat applications. We had several high-caliber candidates in the pool. This is good news because it tells us we have many engaged, successful shareholders offering their talents to our corporation.

After careful deliberation, the board selected Janelle S. Hyatt. Her professional and life accomplishments are impressive.

Janelle’s current position is Nurse Practitioner (NP) in a pain management clinic in Richland Washington. To earn the NP credential, she received her Master of Science in Nursing from Simmons College, Boston, 2018, after earning a Bachelor of Science in Nursing, Magna Cum Laude, 2014, and an Associate of Applied Science, 2011, in Alaska. Janelle completed her practicums in Anchorage at Southcentral Foundation, Jordon Creek Health Center, and Benteh Nutah Native Primary Clinic. In 2013, she won the Practice Excellence Award Program (PEAP) honor from Alaska Native Medical Center. Janelle is a licensed NP in Alaska, Oregon, and Washington.

Nurse Practitioner is Janelle’s second career and second degree. After graduating from Ketchikan HS in 1985, she earned a Bachelor of Arts in Communication from Washington State University. Janelle then spent 15+ years in technology support in San Francisco, serving companies such as Microsoft, Walmart, and many dot.com startups.

Between careers, Janelle traveled the world backpacking across South America, Europe, Thailand, Australia, and New Zealand before returning to Alaska to pursue her dreams in the medical field.

Janelle’s track record includes leadership and prior board service. As past President of San Francisco Triathlon Club, Janelle is herself a noted triathlete (swimming, cycling, running) competing successfully in multiple IronMan races. She now serves as Secretary and board member of Columbia River Nurse Practitioner Association. Since 2000 Janelle has played an important role fundraising for KHHF through her donations and volunteer contributions.

Significantly, Janelle is our first “second generation” (inherited or gifted shares) board member. Her qualifications, and those of other top-notch submissions this year, bodes well for Kavilco’s future.

Please join us in welcoming Janelle S. Hyatt to the Kavilco board.

Kavilco – Audited Financial Statements 2023

By Kavilco Editor | February 28, 2024

The Kavilco – Audited Financial Statements 2023 have been published.

Use the link, below, to download the PDF.

December 31 2023 Audited Financial Statements

Raw text from the report

1 FINANCIAL STATEMENTS DECEMBER 31, 2023
2 Contents
Report of Independent Registered Public Accounting Firm – Opinion (Fortune CPA,
Inc.; Orange, CA, USA; PCAOB 6901)….…………..……………………………………3
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES ……………………………………………….4
SCHEDULE OF INVESTMENTS ……………………………………………………. 5 through 8
STATEMENT OF OPERATIONS ……………………………………………………………………9
STATEMENT OF CHANGES IN NET ASSETS……………………………………………..10
FINANCIAL HIGHLIGHTS ………………………………………………………………………….11
NOTES TO FINANCIAL STATEMENTS …………………………………….. 12 through 18
Report of Independent Registered Public Accounting Firm – Internal Controls
(Fortune CPA, Inc.; Orange, CA, USA; PCAOB 6901)………………………………………19
333 City Blvd W 3rd Floor Orange, CA 92868 1
Phone (714)-820-3316 Fax (714)-333-4992
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and the Board of Directors
Kavilco Incorporated
Kasaan, Alaska
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Kavilco Incorporated (the Fund),
including the schedule of investments, as of December 31, 2023, the related statement of operations for the
year then ended, the statements of changes in net assets and the related notes (collectively referred to as the
financial statements) and the financial highlights for the year ended December 31, 2023. In our opinion, the
financial statements and financial highlights present fairly, in all material respects, the financial position of the
Fund as of December 31, 2023, the results of its operations for the year then ended, the changes in net assets,
and the financial highlights for the year ended December 31, 2023, in conformity with accounting principles
generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on
our audits. We are a public accounting firm registered with the PCAOB and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to
obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express
no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of December 31, 2023, by
correspondence with the custodian. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
/s/ Fortune CPA, Inc
We have served as the Company’s auditor since 2022.
February 27, 2024
3 See Notes To Financial Statements
4 KAVILCO INCORPORATED STATEMENT OF ASSETS AND LIABILITIES
December 31, 2023
See Notes To Financial Statements
5 KAVILCO INCORPORATED SCHEDULE OF INVESTMENTS
December 31, 2023
See Notes To Financial Statements
6 SCHEDULE OF INVESTMENTS (continued)
December 31, 2023
Principal Amount
or Shares Fair Value
See Notes To Financial Statements
7 KAVILCO INCORPORATED
SCHEDULE OF INVESTMENTS (continued)
December 31, 2023
Principal Amount
or Shares Fair Value
See Notes To Financial Statements
8 SCHEDULE OF INVESTMENTS (continued)
December 31, 2023
See Notes To Financial Statements
9 KAVILCO INCORPORATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2023
See Notes To Financial Statements
10 KAVILCO INCORPORATED STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 2023 and 2022
See Notes To Financial Statements
11 KAVILCO INCORPORATED FINANCIAL HIGHLIGHTS
For the Years Ended December 31, 2023 TO 2019
12 NOTES TO FINANCIAL STATEMENTS
Note 1. Organization
Kavilco Incorporated (“the Fund”) is a village corporation within the Sealaska region organized on
November 13, 1973, pursuant to the Alaska Native Claims Settlement Act (“ANCSA”) of 1971.
Under ANCSA, the Native claims to land in Alaska were settled in exchange for part of the state’s
land and compensation. Settlement benefits were given to Natives of Alaska villages in the form
of ownership shares in village corporations that were organized pursuant to ANCSA. The Fund
was organized for the purpose of securing and administering the land and benefits for the
Natives of the Kasaan village in Alaska. Contributed capital includes receipts from the U.S.
government and the state of Alaska under provisions of ANCSA.
On November 1, 1989, the Fund began to operate as a self-managed, closed end management
investment company, as defined by the Investment Company Act of 1940 (“the Act”). The Fund is
subject to various restrictions imposed by the Act and the Internal Revenue Code, including
restrictions on borrowing, dividend, distribution policies, operations, and reporting requirements.
The Fund’s investment decisions focus primarily on large-cap dividend equity investments and
fixed income investments, are made by management under the direction of the Board of
Directors.
Note 2. Significant Accounting Policies
As an investment company, the Fund follows the accounting and reporting guidance of the
Financial Accounting Standards Board Accounting Standard Codification Topic 946 “Financial
Services – Investment Companies.” The financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America (“GAAP”), which
require management to make certain estimates and assumptions at the date of the financial
statements that affect certain reported amounts and disclosures. Actual results could differ from
those estimates. Subsequent events, if any, through the date that the financial statements were
issued have been evaluated in the preparation of the financial statements. The following
summarizes the significant accounting policies of the Fund:
Cash and Cash Equivalents
Cash and cash equivalents include cash on deposit with banks. The Fund considers all highly
liquid instruments with a maturity of three months or less to be cash equivalents. The Fund has
cash balances in excess of federally insured limits.
Valuation of Investments
All investments are recorded at estimated fair value, as described in Note 3.
Investment Transactions and Income
Investment transactions are recorded on a trade date basis. Realized gains and losses from
securities transactions are computed using the last in, first out (“LIFO”) method. Interest income is
recorded on an accrual basis as adjusted for the amortization of discounts and premiums using
the effective interest method. Premiums and discounts, including original issue discounts, are
amortized for both tax and financial reporting purposes. Dividend income is recorded as of the
ex-dividend date. Unrealized gains and losses are included in the Statement of Operations.
Federal Income Taxes
The Fund files income tax returns in the U.S. federal jurisdiction and Alaska State.
The Fund’s policy is to continue to comply with the requirements of the Internal Revenue Code
that are applicable to regulated investment companies and to distribute at least 90% of its net
investment taxable income to its shareholders. Generally, no federal income tax provision is
required for the Fund.
The Fund records a liability, if any, for unrecognized tax benefits resulting from uncertain income
tax positions taken or expected to be taken in an income tax return. No liability has been
recorded for uncertain tax positions or related interest or penalties as of December 31, 2023.
Dividends and Distributions to Shareholders
Dividends and distributions to shareholders are recorded on the payable date. Dividends are
generally declared and paid twice a year. Capital gain distributions are generally declared and
paid annually. The timing and characterization of certain income and capital gains distributions
are determined in accordance with federal tax regulations and may differ from those determined
in accordance with accounting principles generally accepted in the United States.
Directors’ Compensation and Expenses
Each member of the Board of Directors receives compensation for each board meeting attended
during the year, in addition to a per diem allowance. Directors are also reimbursed for such
expenses as accommodation, airfare, and car rental related to Board meetings. In addition to
meeting related expenses, the Fund pays for the medical insurance and out of pocket expenses of
certain directors.
Note 3. Fair Value Measurements
Fair value is defined as an exit price, representing the amount that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants. As such,
fair value is a market-based measurement determined based on assumptions that market
participants would use in pricing an asset or liability. There are three levels that prioritize the
inputs used in measuring fair value as follows:
• Level 1: Observable market inputs such as quoted prices (unadjusted) in active markets for
identical assets or liabilities;
• Level 2: Observable market inputs, other than quoted prices in active markets, that are
observable either directly or indirectly; and
• Level 3: Unobservable inputs where there is little or no market data, which require the
reporting entity to develop its own assumptions.
An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input
that is significant to the fair value measurement. The following is a description of the valuation
methodologies used for assets measured at fair value, including a general description of the asset.
Money Market Funds
Fair value of money market funds is determined using quoted market prices and are categorized
in Level 1 of the fair value hierarchy.
U.S Treasury Bills
Investments in U.S. Treasury bills are reported at cost, net of unamortized premiums or discounts.
Premiums or discounts are amortized into interest income over the term of the investment using
the effective interest rate method. The Fund’s intent is to hold investments to maturity.
Consequently, a provision is not made for unrealized gains or losses on these securities. U.S.
Treasury Bill are categorized in Level 1 of the fair value hierarchy.
Equity Securities (Common Stock)
Securities traded on a national securities exchange (or reported on the NASDAQ national market)
are stated at the last reported sales price on the day of valuation. To the extent these securities
are actively traded, and valuation adjustments are not applied, they are categorized in Level 1 of
the fair value hierarchy.
Real Estate
Real estate represents entitlement to the surface estate of real property, for which no readily
available market quotation exists. Fair value of real estate is determined by management based
on a Certified Forester’s opinion as to the current value and status of the land, along with other
factors. Other relevant factors include the lack of commercially viable timber due to previous
harvest, amount of capital expenditures required for the future growth of timber, location of the
property, recent sales of similar real property in the region and market demand and supply for
this type of real property during the valuation process. Real estate is included in Level 3 of the fair
value hierarchy.
The following table presents information about the Fund’s investments in securities and real
estate measured at fair value as of December 31, 2023:
For the year ended December 31, 2023, there were no realized gain (loss), cost or purchases,
proceeds from sales, or transfers in or out of Level 3 at the end of the reporting period.
Note 4. Real Estate
At December 31, 2023, the Fund owns fee title to the surface estate of 22,946 acres of real estate
located in southeast Alaska.
As of December 31, 2023, there is no commercially viable timber on the real estate and the Fund
has no outstanding timber agreements. The last harvest and sale of timber from this land was in
2001.
The financial statements include real estate valued at $7,200,000 in 2023, the value of which was
determined by an independent appraisal. The value at December 31, 2023 represents an increase
of $510,000 from the value at December 31, 2022 of $6,690,000. The board approved the fair
value estimate of the real estate.
Note 5. Trading Risk
In the normal course of business, the Fund enters into financial transactions involving instruments
where there is risk of potential loss due to changes in the market (market risk) or failure of the
other party to the transaction to perform (credit risk).
Market risk is the potential change in value caused by fluctuations in market prices of an
underlying financial instrument. Subsequent market fluctuations may require selling investments
at prices that differ from the values reflected on the statement of assets and liabilities. Market risk
is directly impacted by the volatility and liquidity in the markets in which financial instruments are
traded. The Fund’s exposure to market risk may be increased in that a significant portion of its
assets may be invested in a relatively small number of investment positions at any one time.
Accordingly, appreciation or depreciation in value of investment positions may have a more
significant effect on the value of the Fund’s portfolio than would be the case in a more diversified
or hedged portfolio.
Credit risk is the possibility that a loss may occur due to the failure of the counterparty to perform
according to the terms of a contract. The Fund’s exposure to credit risk associated with
counterparty nonperformance includes cash deposits that may exceed applicable insurance limits.
The Fund seeks to control such credit risk by maintaining deposits with only high-quality financial
institutions and trading exchange traded financial instruments, which generally do not give rise to
significant counterparty exposure due to the requirements of the individual exchanges.
Catastrophe – Force Majeure Risk
The occurrence of catastrophic events (such as hurricanes, earthquakes, pandemics, such as
COVID-19, acts of terrorism and other catastrophes) could adversely affect the values recorded in
the Fund’s financial statements.
Note 6. Investment Transactions
Purchases of investment securities (common stock) aggregated $149,898 for the year ended
December 31, 2023, and sales of investment securities (common stock) aggregated $17,937,996
for the year ended December 31, 2023.
The U.S. federal income tax basis of the Fund’s investments is the same as for financial reporting
purposes. The gross unrealized appreciation and gross unrealized depreciation for U.S. federal
income tax purposes is $4,633,806 and $2,740,370, respectively, as of December 31, 2023.
Note 7. Premises and Equipment
The following is a summary of premises and equipment at December 31, 2023:
All assets are recorded at cost less accumulated depreciation. Depreciation is computed on the
straight-line method over the estimated useful lives of the related assets, which range from 3 to
15 years. As of December 31, 2023, all assets were fully depreciated.
Note 8. Lease Obligation
The Fund leases office space under a non-cancelable operating lease agreement, which
terminates September 30, 2028. Pursuant to the lease agreement, the Fund paid a lease deposit
of $3,528 which will be credited to the last month’s rent. The discount rate for the office lease is
1.76% and cash paid for rent in 2023 was $41,353. The right of use asset amounting to $203,360
at December 31, 2023, is included in prepaid expenses and other assets. The lease liability at
December 31, 2023 is $207,200, of which the current portion is $39,209 and the non-current
portion is $167,991. Future minimum lease commitments under this non-cancelable operating
lease are as follows:
Rent expense for the year ended December 31, 2023, was $44,415.
Note 9. Net Assets
Upon organization of the Fund, 100 shares of common stock (Class A) were issued to each
qualified shareholder enrolled in the Fund pursuant to ANCSA. The Fund utilized a roll
comprising 120 Alaska Natives eligible to receive stock certificates as certified by the U.S.
Secretary of the Interior. Under the provisions of ANCSA, stock dividends paid or other stock
grants are restricted, and the stock may not be sold, pledged, assigned, or otherwise alienated,
except in certain circumstances by court decree or death, unless approved by a majority of the
shareholders. The stock carries voting rights only if the holder hereof is an eligible Alaska Native.
Nonvoting common stock (Class B) is issued to non-Native persons who inherit stock or are gifted
stock.
The Fund’s capital structure is as follows:
• Common stock:
– Class A, no par value – Authorized, 1,000,000 shares; issued and outstanding, 10,020.53
shares
– Class B, no par value – Authorized, 500,000 shares; issued and outstanding, 1,979.47
shares
Note 10. Dividends and Distributions to Shareholders
On March 10, 2023, a distribution of $13.00 per share was declared. The dividend was paid on
March 22, 2023, to shareholders of record on March 10, 2023.
On November 16, 2023, a distribution of $62.00 per share was declared. The dividend was paid on
November 29, 2023, to shareholders of record on November 16, 2023.
The tax character of dividends and distributions paid during 2023 and 2022 were as follows:
As of December 31, 2023, and 2022, the components of distributable earnings on a tax basis were
as follows:
Note 11. Schedule of Investments
Investments are categorized by type, country, and industry. The industry category represents
management’s belief as to the most meaningful presentation of the classification of the principal
business of the investees. The percentage of net assets is computed by dividing the fair value of
each category by net assets.
Note 12. Pension Plan
Employees of the Fund are covered by a defined contribution pension plan. The Fund contributes
20% of each participant’s compensation to the plan. The Fund’s contributions during the year
ended December 31, 2023, totaled $53,186.
Note 13. Other Income and Expense
The Fund earned income of $259,920 and $123,720 for the years ended December 31, 2023, and
2022, respectfully, as a result of ANCSA Section 7(i), which requires regional corporations to
distribute 70% of any net revenues derived from timber resources and the subsurface estate to
other regional corporations, which then redistribute under Section 7(j) 50% of such amounts to
the village corporations and at large shareholders.
Other income also includes $16,920 of lease and rental income for each of the years ended
December 31, 2023 and 2022, respectively.
333 City Blvd W 3rd Floor Orange, CA 92868
Phone (714)-820-3316 Fax (714)-333-4992
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and the Board of Directors
Kavilco Incorporated
Kasaan, Alaska
In planning and performing our audit of the financial statements of Kavilco Incorporated (the Fund)
as of and for the year ended December 31, 2023, in accordance with the standards of the Public
Company Accounting Oversight Board (United States) (PCAOB), we considered the Fund’s internal
control over financial reporting, including controls over safeguarding securities, as a basis for
designing our auditing procedures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-CEN, but not for the purpose of
expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting.
Accordingly, we express no such opinion. The management of the Fund is responsible for establishing
and maintaining effective internal control over financial reporting. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected benefits and related costs
of controls. A company’s internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles (GAAP).
A company’s internal control over financial reporting includes those policies and procedures tha t (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with
GAAP, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of a
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
A deficiency in internal control over financial reporting exists when the design or operation of a control
does not allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the Fund’s annual or interim financial statements will not
be prevented or detected on a timely basis.
Our consideration of the Fund’s internal control over financial reporting was for the limited purpose
described in the first paragraph and would not necessarily disclose all deficiencies in internal control
that might be material weaknesses under standards established by the PCAOB. However, we noted
no deficiencies in the Fund’s internal control over financial reporting and its operation, including
controls over safeguarding securities, that we consider to be a material weakness as defined above as
of December 31, 2023.
This report is intended solely for the information and use of management and the Board of Directors
of Kavilco Incorporated and the Securities and Exchange Commission and is not intended to be and
should not be used by anyone other than these specified parties.
/s/ Fortune CPA, Inc
February 27, 2024

Jeane Breinig Elected Kavilco President

By Kavilco Editor | January 11, 2024

Jeane BreinigWe are honored to announce the election of Jeane Breinig as the new President of Kavilco Incorporated. Jeane brings a profound understanding of our cultural heritage, a commitment to making decisions that enhance the corporation and the community and has a visionary approach to leadership.

With Jeane Breinig at the helm, we are confident in the continued growth and prosperity of our corporation. She embodies the principles of stewardship and sustainability that have set Kavilco apart.

Jeane has been a Kavilco Board member since 1993 and has been active in the Kasaan Haida Heritage Foundation since its inception. We encourage you to join us in offering Jeane your support as she embarks on this significant role within our corporation.

Sincerely,

Kavilco Board of Directors

Vacancy on the Kavilco Board of Directors

By Kavilco Editor | January 10, 2024

January 10, 2024

To All Kavilco Shareholders RE: Vacancy on the Kavilco Board of Directors

Dear Shareholders: As you are aware, the passing of our President Louis L. Jones, Sr. has left a vacant seat on the Kavilco Board of Directors that must be filled.

Louis L. Jones, Sr. was re-elected to a three-year term during the November 2021 Annual Shareholders Meeting. As provided by Kavilco’s by-laws “A vacancy occurring in the Board of Directors may be filled by the vote of a majority of the remaining directors though the majority is less than a quorum of the Board. A director elected to fill a vacancy is elected for the unexpired term of his predecessor.” Accordingly, the available seat will be filled by Board appointment for the remainder of Mr. Jones’ three year term expiring in November 2024.

Any shareholder interested in this appointment should submit a one-page cover letter and a one-page resume to Kavilco’s Seattle office by mail, fax (information above) or by email to carol.kavilco@gmail.com. Responses must be postmarked or received by other means by February 16, 2024.

The Board will review all responses received by this deadline during the March 1, 2024 Board meeting. The results of their review will be announced in a letter to all shareholders following the meeting.

We encourage all interested shareholders to respond. If you have any questions, please contact us at 1-800-786-9574 or 206-624-6166.

Sincerely,

Jeane Breinig official signature - 2024

Jeane Breinig, President

KAVILCO INCORPORATED

Kavilco President Louis L. Jones, Sr. Rest In Peace 1937 To 2023

By Kavilco Editor | January 3, 2024

Louis Jones at a podiumLouis Laird Jones, Sr., 86 years old, of Kasaan, Alaska, passed away surrounded by family in Ketchikan on November 22, 2023. Louis, also known as “Louie,” “Poppy,” and later known as “Cha” by his grand and great-grandchildren, was born on October 26, 1937.

His boarding school experiences include attending grade school at Haines House, attending Chemawa Indian School, Mt. Edgecumbe High School, and Sheldon Jackson school. After high school at Mt Edgecumbe, he joined the U.S. Army and served in the 101st Airborne Division. After proudly serving our country, he attended Laney College in Oakland, CA, from 1962-65, where he studied diesel mechanics.

Louis Jones at the wheel of a boatIn his early years, Louie enjoyed a proud heritage that included boat building with his father and grandfather in Kasaan, commercial purse seining, and halibut fishing on the boat “Invictus” his father and family built. He also loved to hunt and subsistence harvesting and fish. For most of his life, the waters in Southeast Alaska kept drawing Louie back. He especially enjoyed sharing those experiences with his children and grandchildren.

The event that would shape the rest of his life happened while king crab fishing in Kodiak, Alaska. There he met the woman who would become his lovely bride, Lathalia “Paige”. Their wedding was on June 18, 1966, in his parents living room in Ketchikan. Louie and Paige made their home in Seattle where he began working on Foss Tugboats which set the stage for him to join the Alaska Marine Highway and spent the rest of his professional marine career. He retired as the first Alaska Native Chief Engineer. Through those travels and connections, he is respected far and wide for his engineering experience.

Throughout the years, he was also a noted Haida carver. Most of his art is proudly showcased by his family. He carved Kavilco’s second Watchman gavel in 2015. It was carved from alder wood with a walking stick under his chin and his watchful eyes made of abalone shell.

From 1979 Louie served on the Kavilco Board of Directors and was Kavilco’s President from 2014 until the time of his passing. Louis was a Director during major economic events such as the timber sale to ITT Rayonier for $25 million, recessions, the operating loss to Drexel, Burnham and Lambert, Group Inc., the Stock market crash of ‘87 and 2000, the 2008 collapse of the housing bubble and President during Covid19.

Louis said it was an honor to be President of Kavilco and his last official action for Kavilco was presiding over Kavilco’s annual meeting and dinner held in Ketchikan on November 21, 2023 acknowledging Kavilco’s 50th Anniversary.

Louie enjoyed spending time with people he cared about. He was an avid Seahawks fan and especially enjoyed attending many football games with his sons and their families. He also enjoyed playing cards.

He was preceded in death by his beloved wife “Paige” Jones. They were married 47 years. He had many amazing accomplishments in his life. His pride and joy were the dynamic family they raised together, watching their sons raise their families, and being proud of their many accomplishments.

Louie valued family the most. He is survived by his four sons and their wives, who he considered daughters. He had ten grandchildren and four great-grandchildren. Survivors include:

  • Louie and Angie Jones Jr. and their two children, Diesel and Traijen.
  • Michael Allen Jones, his son and daughter-in-law Michael and Kimberlyn, with their daughter (great-grandchild) Lathalia.
  • Randell and Gina Jones and their three children, Rayna, Victoria, and Raymond. Rayna and Austin also provided three more great-grandchildren: Asher, Blair, and Daniel.
  • Henry and Crystal Jones and their four children, Peyton, Drake, Harper, and Kinsley Paige.
  • Siblings Ramona Hamar, Diane (George) Demmert, nieces, nephews, and many honored extended family members.

Louis Jones and family at a Seahawks game

Louie’s legacy will continue to shape future generations.

Listen to Louis A. Thompson: Julia Coburn and Caroline Hendrixson

By Kavilco Editor | November 14, 2023

Julia Coburn and Caroline Hendrixson

Original Shareholders Julia Jones Coburn and Caroline Young Hendrixson; clan sisters, second cousins and best pals, taken in Kasaan, circa 1938.The old schoolhouse is in the background and beyond that one of the first houses built in Kasaan occupied by Pauline and Bill Blackstad for a number of years, now owned by Original Shareholder Juanita Smith. Photo courtesy of Julia Coburn, Kavilco Archives

Listen to Louis A. Thompson: Kasaan Cornet Band

By Kavilco Editor | November 14, 2023

Cornet Band, 1920s

Top row left to right: Joe Jones, Louis Jones, unidentified man, Bill Irvine, unidentified man, Felix Young, unidentified man, Robert Jones, Nick Baronovich, unidentified man, George Holdane, unidentified man. Middle row: fourth from left-Susie Jones (Mrs. Joe Jones); second from right-Aunty Lela; far right-Mrs. Patty Henry. Bottom row: far right-Mary Baronovich. Photo courtesy of Ketchikan Museum

Listen to Louis A. Thompson: New Kasaan 1908

By Kavilco Editor | November 14, 2023

New Kasaan, 1908

New Kasaan in 1908. Photo courtesy of Kavilco Archives.

Listen to Louis A. Thompson: Kasaan 1929

By Kavilco Editor | November 14, 2023

Aerial photo of Kasan, 1929

Aerial of Kasaan in 1929, showing the entire village and the cannery. The boardwalks, which were removed in 1938, are clearly visible throughout Kasaan. Photo courtesy of the U.S. Forest Service Archives