January 2020 Investor Presentation...Recent completion of strategic review and new leadership in place to emphasize growth of core business 3 Key Financial Items Ticker OTCQB: DPDW

April 2020Investor Presentation

deepdowninc.com | OTCQB: DPDW

Forward-Looking Statements

Any forward-looking statements are made pursuant to the safe harbor provisions of thePrivate Securities Litigation Reform Act of 1995. We wish to caution the reader that theseforward-looking statements that are not historical facts are only predictions. The forward-looking statements contained herein are based on current expectations that involve anumber of risks and uncertainties. These forward-looking statements are based on currentexpectations, and we assume no obligation to update this information. Therefore, our actualexperience and the results achieved during the period covered by any particular projectionsor forward-looking statements may differ substantially from those projected. Consequently,the inclusion of projections and other forward-looking statements should not be regarded asa representation by us or any other person that these estimates and projections will berealized, and actual results may vary materially. There can be no assurance that any of theseexpectations will be realized or that any of the forward-looking statements contained hereinwill prove to be accurate.

In addition, a reconciliation of excluded items and non-GAAP financial measures can be foundon the Company’s website at www.deepdowninc.com.

2

http://www.deepdowninc.com/

Investment Highlights

Leading pure-play provider of key oilfield services and equipment forcomplex deepwater and ultra-deepwater applications

Primarily targeting high value assets and mission critical projects foroffshore operations between the platform and wellhead

Innovative and customized solutions that meet the global needs of ourcomprehensive portfolio of blue-chip customers

Extensive subsea engineering and maintenance capabilities

Debt-free balance sheet

Favorable industry trends supporting backlog growth

Recent completion of strategic review and new leadership in place toemphasize growth of core business

3

Key Financial Items

Ticker OTCQB: DPDW

Stock Price (at close: 03/27/20) $0.50

52 Week Range $0.35 - $0.95

Shares Outstanding @ 3/27/20 12.5M

Market Cap $6.3M

Cash* $3.5M

Enterprise Value $2.8M

Working Capital* $4.9M

Book Value* $14.4M; $1.15/share

TTM Revenue* $18.9M

EV / TTM Revenue 0.14x

*Per 10-K filing for the period ending 12/31/19

4

Construction EquipmentActive Heave Compensators

Compliant Umbilical Splice

Loose Steel Tube Flying Leads (LSFL®)

Bend Limiters

Subsea Deployment Basket

Installation CarouselsInstallation

Equipment

Subsea Accumulator Module

Installation Buoyancy

Temporary Hang-off Mechanism

BS Latchers® & Bend StiffenersUmbilical Installation Services

Intervention Tooling

Topside Equipment

Testing & Monitoring Commissioning & Pumping Engineering & Consulting

NHUs®

RIV/SSIV Controls

UTAs

TUTAs

LSFL®EFL/ HFL

Deployment Frames

Moray® Termination

SystemTerminations

Products & Services

5

Mission-Critical Service and Product Offerings Deep Down offers essential services and products to deploy chemicals, hydraulics,

fiber optics, and electricity to vital subsea equipment such as Christmas trees

o Ensures the successful production of subsea wells, where faulty products andinferior quality lead to production downtime and the potential for hazardousconditions

Manufacturer of key pieces of equipment plus installation and commissioning

Proven ability to collaborate with operators’ engineering teams, installationcontractors, and subsea equipment manufacturers to determine the fastest,safest, and most cost-effective solutions

6

Customized Solutions

Crafting custom solutions with quick response times separates Deep Down fromthe competition

Includes the design and manufacture of a wide range of products due to superiortechnological capabilities

First-class installation and repair capabilities

Strictest commitment to SAFETY

7

Product Spotlight: Loose Steel Flying Leads (LSFL)

8

LSFL are multiple loose steel tubes ▪ Connect to subsea tree▪ Flexibility facilitates overall system installation▪ DPDW patented designCustomer Advantages▪ Ease of installation▪ Cost effective▪ Stronger constructionBusiness Opportunity ▪ Market size is $1B+ per year▪ Average order size - $1M - $4M▪ Customer base and order size continues to grow▪ Ease of installation reduces vessel time / cost

Growing Customer Base

Major integrated oil, large independent & national oil & gas “Operators”

International and regional installation “Contractors”

Original equipment manufacturers “OEMs”

Opportunities: refinery operators, foreign government owned contractors, etc.

9

Operators: ~85% Contractors & OEMs: ~15%

Note: Customer Base percentage split as of 12/31/18

Case Study – Umbilical Re-termination

Before After

Customer realized $60 million+* in cost savings

After 16 years of service, rough weather and extremepressure caused a customer’s umbilical condition todegrade to the point that intervention was required

Each line in the umbilical had its own issue, from basicleaks to being fully plugged, which added to the complexityof the decommissioning. As such, the umbilical was freedof hazardous fluids and lifted to the overhead deck

After a clamp handover, enough of the umbilical wasexposed for Deep Down personnel to install a brand newre-termination of the armor pot. Once completed, thetermination was then lowered back down to the I-Tubeand re-commissioned for use

This first-of-its-kind operation established a best practiceprocedure to conduct a re-termination of an agingumbilical directly from the platform

Deep Down remained offshore at all times ensuresuccessful re-termination and re-commissioning

This innovative procedure ended up saving the customerover $60 million

10*Cost of pulling umbilical, procuring, and installing new one

Strategic Review & Board of Director Adjustments

Deep Down recently concluded a review of strategic alternatives

o This in-depth effort has helped identify our strengths, core value proposition,some challenges we face, and the best path forward for creating shareholdervalue.

o Renewed focus on the core business, and an operating team that better matchesour objectives

Appointed two new independent Board Directors in April 2019 (both largeshareholders)

o Neal Goldman

o David Douglas

Newly reconstituted board has decades of hands-on small-cap expertise asinvestors and managers

11

Ownership Composition

20%

24%

14%

42%

% of Total Outstanding Shares (12.5M at 1/24/20)

Management & Directors Former CEO Institutional Other

12

Revenue & EBITDA Progression

$3.7 $4.1 $3.9

$4.5

$6.3

$5.3 $4.4

$2.9

Q1 '18 Q2 '18 Q3 '18 Q4 '18* Q1 '19 Q2 '19 Q3 '19 Q4 '19*

Revenue EBITDA

*includes $1.9M and $0.4M of asset impairment in 2018 & 2019 respectively

13

(USD$ millions)

Appendix

Leadership

15

• Joined in 2012• Prior to CEO, Mr. Njuguna held a variety of roles within Deep Down including CFO, Business Manager, and Corporate

Accounting Manager• Has over 20 yrs. of international business experience, including various operational and financial management roles in Africa,

the UK, and the US• Holds an MBA from the University of Texas at Austin

Charles Njuguna – Chief Executive Officer

• Joined in September 2019• Has over 20 years of international leadership roles with Siemens Oil & Gas and TechnipFMC• Holds an MBA from the University of Virginia

Micah Simmons – Chief Operating Officer

• Joined in 2008• Has 20 years experience with subsea umbilicals, turn-key installations, controls, tree design, and fabrication

Neil Stuckey – Operations Manager

• Joined in January 2020• Has 25 years of offshore development roles, most recently with National Oilwell Varco• Holds a BS from Penn State University followed by 8 years in the U.S. Navy

Richard Blackett – VP of Sales & Business Development

• Joined in January 2020• Most recently served in dual roles as the Manager of Global FP&A and Manager of Investor Relations at Dril-Quip, Inc.• Holds an MSA and MBA from Southern Methodist University

Trevor Ashurst – VP of Finance

Comprehensive Service & Product Offerings

16

SERVICES

• Engineering and Project Management

• Refurbishment and Intervention Services

• Installation Management

• Manufacturing and Fabrication

• Specialty Welding

• Pull-in and Spooling Operations

• Umbilical Monitoring, Testing, and Commissioning

• System Integration Testing (SIT)

RENTAL

• Electro-Hydraulic Flying Lead Deployment Frames

• Rapid Deployment Cartridges (RDC) & Subsea Deployment Baskets (SBD)

• Buoyancy Modules

• Hydraulic Powered Units (HPU) & Horizontal Drive Units (HDU)

• Tensioners

• Lay Chutes & Installation Equipment

• Installation Carousels

PRODUCTS

• Loose Steel Tube Flying Leas (LSFL)

• DDI Junction Plate (J-Plate / MQC)

• Compliant Umbilical Splice

• Moray

• Bend Limiters

• Subsea Accumulator Module (SAM)

• RIV / SSIV Control Systems

• Non-Helical Umbilical (NHU)

• Integrated Logic Cap (ILC)

• Topside Umbilical Termination Assembly (TUTA)

• Subsea Umbilical Termination Assembly (SUTA)

• Bend Stiffener Latcher (BSL)

• Installation Carousels

Service Capabilities

17

Manufacturing and Fabrication: Full capabilities for a variety of machining, welding, fabrication, electrical wiring, and specialized products

Specialty Welding: Skilled welders able to work to the most stringent codes and requirements to weld exotic materials (e.g. Super Duplex, Inconel and Nitronic)

Refurbishment and Intervention Services: DDI offers many solutions to subsea controls issues utilizing several methods of intervention and equipment refurbishment, to expedite oil and gas production

Engineering and Project Management: Comprehensive, customer specific solutions and risk management for every segment of a project

Installation Management: Assess the intricate details of an installation campaign and determine requirements and develop comprehensive installation procedures

Pull-In and Spooling Operations: Provide planning, supervision, specialized equipment, and coordination with offshore installation personnel to exceed customer’s needs

Service Capabilities, Cont’d

18

Umbilical Monitoring, Testing, and Commissioning: Specialized personnel and equipment to complete job specific requirements for an efficient offshore installation campaign

System Integration Testing (SIT): Assist in the completion of SITs every step of the way to ensure equipment meet required specifications

Installation Carousel: Large horizontal unit capable of storage and deployment of various cables and umbilicals

Rental Equipment

19

Buoyancy Modules:Low-mass material used to reduce the submerged mass of the product

Rapid Deployment Cartridges (RDC) and Subsea Deployment Baskets (SDB®): Provide contractors with safer methods to install small umbilicals and flying leads

Lay Chutes and Installation Equipment: Accommodate vessel configurations and can withstand increasing loads during deployment and recovery operations

Electro-Hydraulic Flying Lead Deployment Frames: Straightforward method of deploying electrical, hydraulic and optical flying leads

Hydraulic Powered Units (HPU) and Horizontal Drive Units (HDU): Installation equipment used for spooling operations of umbilicals and flying leads

Tensioners: Installation equipment used to safely control installation tensions of subsea cables and umbilicals while being deployed

Product Offerings

20

Bend Limiters: Limit the bend radius of steel tube umbilicals or flying leads

Moray®: A standard termination system for the construction of hydraulic flying leads and umbilical termination

Compliant Umbilical Splice: Repairs damaged umbilicals or joins two like or unlike umbilicals together

Loose Steel Tube Flying Lead (LSFL®): Is a means for conveying electrical and hydraulic controls to a subsea field, located on the sea floor

DDI Junction Plate (J- Plate/ MQC): A stab plate fitted to flying leads, enabling hydraulic connection between subsea control equipment such as UTAs, distribution units and wellhead Xmas trees

Subsea Accumulator Module (SAM): A pressurized control fluid accumulation to augment the existing subsea distribution control system with localized volume and pressure control features

Product Offerings, Cont’d

21

RIV/SSIV Control Systems: Safety control system that is integrated into a subsea riser’s tieback to prevent flow of uncontrolled hydrocarbon

Topside Umbilical Termination Assembly (TUTA): Compact hydraulic, electrical, and fiber optic termination that allows for platform interface to subsea control systems

Non-Helical Umbilical (NHU®): Portable umbilical manufacturing process allowing for manufacture in other regions, reducing lead times and installation complexity, and meeting local content requirements

Bend Stiffener Latcher (BSL®): Designed to lock a dynamic umbilical to an existing or standard protruding rim

Integrated Logic Cap (ILC): A combination of outboard MQCs and inboard MQCs designed to loop, distribute, or redirect circuits of subsea terminations

Subsea Umbilical Termination Assembly (SUTA): Umbilical Termination for subsea distribution of hydraulic, electrical, and fiber optic controls for oil and gas field

Income Statement

22

Year Ended December 31,

(In thousands, except per share amounts)

2019

2018

Revenues

$

18,915

$

16,175

Cost of sales:

Cost of sales

11,013

9,803

Depreciation expense

1,105

1,590

Total cost of sales

12,118

11,393

Gross profit

6,797

4,782

Operating expenses:

Selling, general and administrative

8,926

7,818

Asset impairment

396

1,890

Depreciation and amortization

276

282

Total operating expenses

9,598

9,990

Operating loss

(2,801

)

(5,208

)

Other income:

Interest income, net

12

35

Gain on sale of assets

7

439

Total other income

19

474

Loss before income taxes

(2,782

)

(4,734

)

Income tax (benefit) expense

(8

)

8

Net loss

$

(2,774

)

$

(4,742

)

Net loss per share:

Basic

$

(0.21

)

$

(0.35

)

Fully diluted

$

(0.21

)

$

(0.35

)

Weighted-average shares outstanding:

Basic

13,386

13,553

Fully diluted

13,386

13,553

Balance Sheet

23

Balance sheet data (in thousands): Dec. 31, 2019 Dec. 31, 2018

Cash & ST investments $3,523 $2,015

Total current assets $8,947 $9,990

Total current liabilities 4,408 2,964

Working capital 4,737 7,026

Total assets 21,551 20,120

Total liabilities 7,118 3,011

Stockholders' equity 14,363 17,109

Investor Contacts:Chris Eddy (Catalyst IR)212 924 [email protected]

www.deepdowninc.com

Trevor Ashurst18511 Beaumont HighwayHouston, TX [email protected]

mailto:[email protected]://www.deepdowninc.com/mailto:[email protected]

April 2020�Investor PresentationForward-Looking StatementsInvestment HighlightsKey Financial ItemsProducts & ServicesMission-Critical Service and Product OfferingsCustomized SolutionsProduct Spotlight: Loose Steel Flying Leads (LSFL)Growing Customer BaseCase Study – Umbilical Re-terminationStrategic Review & Board of Director AdjustmentsOwnership CompositionRevenue & EBITDA ProgressionAppendixLeadershipComprehensive Service & Product OfferingsService CapabilitiesService Capabilities, Cont’dRental EquipmentProduct OfferingsProduct Offerings, Cont’dIncome Statement Balance Sheet Slide Number 24