Koil Energy Solutions Inc. (KLNG)

[JoeSmith]

Email from Steve Haag to Trueheart
(Steve's responses are in bold)
Mr. xxxx

Thanks for your e-mail. I will answer your questions below in-kind for your convenience.


Please feel free to contact me anytime should you have an follow-up questions.

Regards,

Steven M. Haag
vice-president of investor relations

[e-mail]
Deep Down, Inc.
15473 East Freeway
Houston, Texas 77530

Office: 281.862.2201
Fax: [phone]

www.deepdowninc.com

Subsea Service and Technology
Innovative Deepwater Solutions

These are simply my personal comments, and should not be relied upon in your investment decisions. I strongly urge you to conduct your own due diligence with regard to any investment in Deep Down, Inc. I respectfully refer you to Deep Down's filings with the United States Securities and Exchange Commission.

Dear Mr. Haag:

I trust you are having a good day.
I have a few questions and comments regarding the actions of management and the BOD in the past few months.

First and foremost are the anti-takeover provisions created via By-laws and Amendments. The "poison pill" strategy is well-crafted and certainly gives the BOD and management complete control of the company, in my estimation.

Was a company (s) or individual (s) or a combination of the two actively seeking control of Deep Down? Was the "poison pill" adopted to combat what was perceived or recognized to be a take-over or buyout attempt?

Not really much more I can say about that, there was no hidden agenda. This is just another example of the competence, experience, and foresight management possesses to proactively protect the interest of the company and its shareholders.



The purchase of Flotec by Deep Down was a stroke of genius. Buying a company that matches its sale price with revenue is spectacular. Who was it that first became aware of the availability of Flotec? Kudos to that person. It appears to me that if, indeed, a take-over attempt was in the works that Flotec was the target, although I believe the company as a whole is very attractive.

I agree with your assessment - it certainly was "brilliant." Although the oil and gas market is large, it is a tight-knit group. Ron Smith, Gene Butler, and Steve Pahls seem to know everyone. You can bet that management knows what is going on in the industry, and is anticipating, planning, and maneuvering our company with that knowledge. I agree, flotation and syntactic foam in general, is currently, and will increasingly be, in demand as an attractive and durable buoyancy solution.


Another thing that I would like to discuss is the recent placement of 57,000,000 shares in the Prospectus in return for the funds to retire that onerous loan, acquire Flotec and have cash on hand.

The group that funded the effort was called the "Sellling Shareholders." What was the specific reason for that very interesting name?
There is no hidden reason, just a convention used in the filing - not unusual language for a reg statement.
Were you to understand and did you anticipate that the sale of the shares to the group could have resulted in a decline in the price per share of Deep Down?
No, these shares are currently restricted, they have not been traded as of this writing. A low float and arbitrary day trading were likely some of the cause; but, that is only conjecture on my part. The bottom line here - all stocks fluctuate, and it's sometimes hard to tell why - one thing I do know, the Company has never been on stronger financial footing, nor had more opportunity that it does right now.

Did the company enter into the agreement because of an urgency to fund the purchase of Flotec and simultaneously erase the high-interest loan and put cash into Deep Down's coffers?
There was no urgency, this was a carefully planned process over months.


I would appreciate your putting my questions to rest, some of which probably makes you wonder how an individual can even put together a train of thought to come up with them. LOL

I have been a long time investor in Deep Down. I believe in the company and its management, and by that I mean I have high expectations of what Deep Down can do. I think the company will be a powerhouse in its sector of the oil business.
We agree with your estimation, if fact, we are growing everyday as you see from our camera system. Thanks so much for your encouraging comments, we are pleased to have you as a shareholder.


Thank you for your consideration of these questions.

Sincerely,
xxxx



My posts are my opinions. Always dd to your own comfort level.