Chairman’s Letter

Dear shareholders,

The informal shareholder meeting was held on May 31 here in Kotzebue. I would like to extend my sincere thanks to those shareholders who were nominated for the seats open on this year’s Board of Directors. Serving as a member of the board is an important responsibility. A director spends many evenings away from family attending committee meetings, shareholder events, special Board meetings and KIC’s regular Board meetings, which are scheduled on the fourth Thursday of every month. In addition to the challenges of being required to make important decisions that are critical to KIC’s success, directors are required to read many pages of operational reports and monthly financial statements.

On August 15, KIC will hold its Annual Meeting of Shareholders. In the yearly cycle of events, this is one of the most important meetings for the Corporation. The annual meeting provides an opportunity to receive the annual report on the status of the Corporation and ask questions or make comments about the information provided. KIC exists for the benefit of our shareholders, and the annual meeting is a time for shareholders to come together, ask questions and elect Board members.

We at KIC believe all shareholders also have the right to ask questions and get good answers any day of the year. The KIC office is open 8 a.m. to 5 p.m. every weekday, and management is always available to provide additional details, or to explain more about any topic that might be of interest. In addition, directors are always willing to listen to our shareholders and bring any concerns to the attention of management and other members of the Board.

Also, shareholders are always welcome at our Board meetings, during which we provide time for comments and questions twice on the agenda in every monthly regular meeting. The goal is to have engaged and well-informed shareholders. Our website, Facebook page, newsletters and annual report are all intended to make sure you know what is happening at KIC. The Board members and management team are interested in knowing what concerns or comments you might have, and we all stand ready to respond when a shareholder wants more information.

One last thing: It’s great to feel the temperatures rising and know that, as the ice melts, there will be the opportunity for hunting and fishing. As you go out to enjoy the summer, please remember to wear life preservers while out on the water, and never operate vehicles either on land or water while under the influence of drugs or alcohol.

I look forward to seeing all of you at the annual meeting and I hope you have a safe and wonderful summer!

Arriiga Taikuu,

Calvin Schaeffer,

KIC Chairman