8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest reported): May 10, 2013

FLOTEK INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-13270	90-0023731
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
10603 W. Sam Houston Parkway N. #300 Houston, TX		77064
(Address of principal executive offices)		(Zip Code)

(713) 849-9911

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This Amendment No. 2 on Form 8-K/A (the “Form 8-K/A”) to the Current Report on Form 8-K of Flotek Industries, Inc., which was originally filed with the Securities and Exchange Commission on May 13, 2013 (the “Form 8-K”), is being filed solely to include the financial statements and pro forma financial information required by Item 9.01 which were excluded from the Form 8-K pursuant to Items 9.01(a) and 9.01(b).

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The audited consolidated financial statements of Florida Chemical Company, Inc. and Subsidiaries as of and for the years ended December 31, 2012 and 2011 are included in this Form 8-K/A as Exhibit 99.1.

The unaudited consolidated financial statements of Florida Chemical Company, Inc. and Subsidiaries as of March 31, 2013 and December 31, 2012 and for the three months ended March 31, 2013 and 2012 are included in this Form 8-K/A as Exhibit 99.2.

(b) Pro forma financial information.

The unaudited pro forma condensed financial information as of and for the three months ended March 31, 2013 and for the year ended December 31, 2012 are included in this Form 8-K/A as Exhibit 99.3.

(d) Exhibits.

Exhibit
Number	Description
23.1	Consent of Independent Auditor, McGladrey LLP.
99.1	Audited Consolidated Financial Statements of Florida Chemical Company, Inc. and Subsidiaries.
99.2	Unaudited Consolidated Financial Statements of Florida Chemical Company, Inc. and Subsidiaries.
99.3	Unaudited Pro Forma Condensed Financial Information.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FLOTEK INDUSTRIES, INC.
Date: July 26, 2013	By:	/s/ H. Richard Walton
		H. Richard Walton
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description
23.1	Consent of Independent Auditor, McGladrey LLP.
99.1	Audited Consolidated Financial Statements of Florida Chemical Company, Inc. and Subsidiaries.
99.2	Unaudited Consolidated Financial Statements of Florida Chemical Company, Inc. and Subsidiaries.
99.3	Unaudited Pro Forma Condensed Financial Information.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITOR

We consent to the incorporation by reference in the Registration Statements (Nos. 333-161552, 333-166442, 333-166443, 333-173806, 333-174199 and 333-189555) on Form S-3 and the Registration Statements (Nos. 333-129268, 333-157276, 333-172596, 333-174983 and 333-183617) on Form S-8 of Flotek Industries, Inc. of our report dated March 29, 2013, relating to our audits of the consolidated financial statements of Florida Chemical Company, Inc. as of and for the years ended December 31, 2012 and 2011, included in this Current Report on Form 8-K.

/s/ McGladrey LLP

Orlando, Florida

July 26, 2013

EX-99.1

Exhibit 99.1

Audited Consolidated Financial Statements of Florida Chemical Company, Inc. and Subsidiaries

Florida Chemical Company, Inc. and Subsidiaries

Consolidated Financial Statements

Independent Auditor's Report	2
Financial Statements
Consolidated Balance Sheets at December 31, 2012 and 2011	3
Consolidated Statements of Income for the years ended December 31, 2012 and 2011	4
Consolidated Statements of Comprehensive Income for the years ended December 31, 2012 and 2011	5
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2012 and 2011	6
Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011	7
Notes to Consolidated Financial Statements	8

Independent Auditor's Report

To the Board of Directors

Florida Chemical Company, Inc.

Winter Haven, Florida

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Florida Chemical Company, Inc. and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2012 and 2011, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for the years then ended and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Florida Chemical Company, Inc. and its subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

/s/McGladrey LLP

Orlando, Florida

March 29, 2013

2

Florida Chemical Company, Inc. and Subsidiaries

Consolidated Balance Sheets

	December 31, 2012		December 31, 2011
Assets
Current Assets:
Cash	$	2,104,874	$	960,104
Account receivable, net of allowance for doubtful accounts of $182,121 and
$141,309, respectively	10,051,841		14,401,597
Inventories, net	9,952,849		21,503,494
Prepaid expenses	469,832		386,900
Total current assets	22,579,396		37,252,095
Property, Plant and Equipment, net	20,060,781		16,070,489
Other Assets	208,080		154,366
	$	42,848,257	$	53,476,950
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	8,160,284	$	14,098,272
Accrued pension payable	431,591		434,261
Accrued salaries payable	164,614		299,908
Customer deposits	225,166		162,796
Line of credit	—		4,950,000
Current portion of long-term debt	278,758		1,581,911
Related party loan payable	—		400,000
Other current liabilities	93,100		329,559
Total current liabilities	9,353,513		22,256,707
Long-Term Debt, net of current portion	540,179		818,938
Total liabilities	9,893,692		23,075,645
Commitments (Notes 7 and 8)
Stockholders' Equity:
Commons stock, $1 par value, 40,000 shares authorized,
10,000 shares issued and outstanding	10,000		10,000
Additional paid-in capital	151,231		151,231
Retained earnings	32,740,576		30,255,302
Accumulated other comprehensive income (loss)	52,758		(15,228		)
Total stockholders' equity	32,954,565		30,401,305
	$	42,848,257	$	53,476,950

See Notes to Consolidated Financial Statements.

3

Florida Chemical Company, Inc. and Subsidiaries

Consolidated Statements of Income

	Year ended December 31,
	2012			2011
Sales	$	102,686,265		$	145,007,325
Cost of sales	80,380,917			112,294,340
Gross profit	22,305,348			32,712,985
Other income	120,586			135,334
Operating expenses:
Compensation and benefits	5,204,070			5,715,814
Selling, general and administration	4,478,092			3,731,885
Occupancy	1,201,186			924,099
Licenses and taxes	753,461			696,981
Insurance	725,912			461,930
Depreciation and amortization	701,873			489,938
Professional fees	384,290			362,948
Other expenses	99,811			248,153
Total operating expenses	13,548,695			12,631,748
Income from operations	8,877,239			20,216,571
Financial income (expense):
Interest income	10			59
Interest expense	(111,593		)	(182,630		)
Total financial expense	(111,583		)	(182,571		)
Net income	$	8,765,656		$	20,034,000

See Notes to Consolidated Financial Statements.

4

Florida Chemical Company, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

	Year ended December 31,
	2012		2011
Net Income	$	8,765,656	$	20,034,000
Other comprehensive income (loss)
Unrealized gain (loss) on investments available for sale	67,986		(14,060		)
Comprehensive income	$	8,833,642	$	20,019,940

See Notes to Consolidated Financial Statements.

5

Florida Chemical Company, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders' Equity

	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balances as of December 31, 2010	$	10,000	$	151,231	$	23,850,709		$	(1,168	)	$	24,010,772
Net income	—		—		20,034,000			—			20,034,000
Other comprehensive loss	—		—		—			(14,060		)	(14,060		)
Distributions to stockholders	—		—		(13,629,407		)	—			(13,629,407		)
Balances as of December 31, 2011	10,000		151,231		30,255,302			(15,228		)	30,401,305
Net income	—		—		8,765,656			—			8,765,656
Other comprehensive income	—		—		—			67,986			67,986
Distributions to stockholders	—		—		(6,280,382		)	—			(6,280,382		)
Balances as of December 31, 2012	$	10,000	$	151,231	$	32,740,576		$	52,758		$	32,954,565

See Notes to Consolidated Financial Statements.

6

Florida Chemical Company, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Year ended December 31,
	2012			2011
Cash Flows From Operating Activities:
Net income	$	8,765,656		$	20,034,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	1,024,129			729,815
Amortization	20,687			13,432
Loss on disposition of equipment	49,599			220,174
Lower of cost or market adjustment to inventories	45,321			998,883
Provision for doubtful accounts	60,000			—
Inventory reserve	43,545			195,010
Change in working capital components:
(Increase) decrease in assets:
Accounts receivable	4,289,756			(5,066,723		)
Inventories	11,461,779			(11,663,690		)
Prepaid expenses	(82,932		)	(134,763		)
Other assets	(6,415		)	(109,416		)
Increase (decrease) in liabilities:
Accounts payable	(5,937,988		)	5,926,543
Accrued pension payable	(2,670		)	52,216
Accrued salaries payable	(135,294		)	38,351
Customer deposits	62,370			89,896
Other current liabilities	(236,459		)	176,100
Net cash provided by operating activities	19,421,084			11,499,828
Cash Flows From Investing Activities:
Acquisition of property, plant and equipment	(5,064,020		)	(8,110,915		)
Net cash used in investing activities	(5,064,020		)	(8,110,915		)
Cash Flows From Financing Activities:
Net (repayments) borrowings on line of credit	(4,950,000		)	4,950,000
Proceeds from long-term borrowings debt	5,000,000			—
Repayments on long-term borrowings debt	(6,581,912		)	(352,697		)
Repayments on related party loan	(400,000		)	—
Distributions paid to stockholders	(6,280,382		)	(13,629,407		)
Net cash used in financing activities	(13,212,294		)	(9,032,104		)
Net increase (decrease) in cash	1,144,770			(5,643,191		)
Cash:
Beginning	960,104			6,603,295
Ending	$	2,104,874		$	960,104
Supplemental Disclosure of Cash Flow Information:
Interest paid, including capitalized interest of $99,081 for 2012	$	222,762		$	178,107

See Notes to Consolidated Financial Statements.

7

Florida Chemical Company, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Summary of Significant Accounting Policies

Nature of business: Florida Chemical Company, Inc. (Florida Chemical) was founded in 1942 and pioneered the collection, manufacturing and marketing of d-Limonene. D-Limonene is the major component in citrus peel oil that is collected during the citrus juicing process. Florida Chemical purchases citrus oils from various processors and distills it at its manufacturing plant in Winter Haven, Florida. The resulting products are used for resin, flavor, fragrance, solvent and chemical synthesis applications. Florida Chemical formed two wholly owned subsidiaries, FC Pro, LLC (FC Pro) and FCC International, Inc (FCCI). FC Pro was created to develop bio-based performance products for industry and has a manufacturing plant in Waller, Texas. FCCI was formed to serve as the Company's commission agent for the sale of certain products to export markets.

The Company sells its products both throughout the United States of America and around the world including South America and Europe. Approximately 27% and 24% of the Company's sales during the years ended 2012 and 2011, respectively, were to customers in foreign countries.

Reporting entity and principles of consolidation: The consolidated financial statements include the accounts of Florida Chemical Company, Inc. and its wholly owned subsidiaries FC Pro, LLC and FCC International, Inc (collectively, the Company). All significant intercompany accounts and transactions have been eliminated in consolidation.

A summary of the Company's significant accounting policies follows:

Revenue recognition: Sales are recognized when the revenue is realized or realizable, has been earned, the price has been fixed or determinable and collectability is reasonably assured. Revenue is recognized as risk and title transfer to the customer which, depending on the sales agreements and shipping terms, generally occurs upon shipment of product or delivery to the customer. The Company's terms of sale are included in its contracts of sale, order confirmation documents and invoices. The Company includes freight fees billed to customers as sales, and related freight costs of $3,402,984 and $3,112,221 for the years ended December 31, 2012 and 2011, respectively, as a component of selling, general and administrative expenses in the accompanying consolidated statements of income.

Accounts receivable and allowances: Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within thirty to sixty days from the invoice date and are recorded at net realizable value. Unpaid accounts receivable with invoices dates over thirty days old do not accrue interest. The allowance for doubtful accounts is based on prior collection experience and management's analysis of specific accounts. After all attempts to collect a receivable have failed, the receivable is written-off against the allowance.

Inventories, net: Inventories consist of orange oils, essences, other by-products and containers and are stated at the lower of cost or market. Cost is determined using the average cost method. The Company evaluates its inventory value at the end of each month to ensure that it is carried at the lower of cost or market. This evaluation includes an analysis of regular cycle count results, a review of potential slow-moving inventory based on historical product sales and forecasted sales, and an overall consolidated analysis of potential excess or obsolete inventory. Adjustments are made monthly, when appropriate. Events which could affect the amount of reserves for excess or slow moving inventory include a decrease in demand for the Company's products due to economic conditions and other factors or price decreases by competitors on specific products. To the extent historical physical inventory results are not indicative of future results and if future events impact, either favorably or unfavorably, the salability of the Company's products or its relationship with certain key vendors, the Company's inventory reserves could differ significantly, resulting in the need for future inventory provisions.

Investments: The Company owns shares of stock of two publicly traded companies, classified as available-for-sale. These investments are carried at fair value with unrealized holding gains and losses, if any, reported as a separate component of accumulated other comprehensive income (loss) and are included as a component of other assets in the accompanying consolidated balance sheets.

8

Florida Chemical Company, Inc. and Subsidiaries

Notes to Consolidated Financial Statements - (Continued)

Income taxes: Under provisions of the Internal Revenue Code, the Company is treated as a Subchapter S-Corporation under the Internal Revenue Code. Under these provisions, the Company does not pay federal or state corporate income taxes on its taxable income because the income is reported on the income tax returns for the stockholders of the Company. Accordingly, the accompanying consolidated financial statements do not contain a provision for income taxes. In addition, management has assessed whether there were any uncertain tax positions, which may give rise to income tax liabilities and determined that there were no such matters requiring recognition in the accompanying financial statements. The Company files income tax returns in the U.S. federal jurisdiction and the States of Illinois, Michigan, New Jersey, Ohio, Georgia and Texas. Generally, the Company is no longer subject to U.S. federal or state and local income tax examinations by tax authorities for years before 2009.

Property, plant and equipment: Property, plant and equipment are recorded at cost. Depreciation is provided using the straight-line method of accounting based on the following estimated useful lives of the assets:

	Years
Machinery and equipment	3	-	20
Furniture and fixtures	5	-	20
Land and building improvements	10	-	40
Buildings			40

Expenditures for major renewals and betterments that extend the useful lives of property, plant and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of long-lived assets: Long-lived assets are evaluated for impairment whenever events or changes in circumstances have indicated that an asset may not be recoverable and are grouped with other assets to the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest charges) is less than the carrying value of the assets, the assets will be written down to the estimated fair value and such loss is recognized in income from continuing operations in the period in which the determination is made. Management determined that no impairment of long-lived assets existed as of December 31, 2012 and 2011.

Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

Comprehensive income: Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It consists of net income and other gains and losses affecting stockholders' equity that, under generally accepted accounting principles, are excluded from net income, such as the changes in fair values of investments available for sale, which is the only item of comprehensive income impacting the Company's accumulated other comprehensive income (loss).

Recent accounting pronouncements: The Financial Accounting Standards Board (FASB) and other entities issued new or modifications to, or interpretations of, existing accounting guidance during the year ended December 31, 2012. The Company has considered the new pronouncements that altered accounting principles generally accepted in the United States of America, and other than as disclosed in these notes to the financial statements, does not believe that any other new or modified principles will have a material impact on the Company's reported financial position or operations.

Reclassifications: Certain amounts in the 2011 financial statements have been reclassified for comparative purposes to conform with the presentation in the 2012 financial statements. The results of these reclassifications had no effect on previously reported assets, liabilities, net income or stockholders' equity.

Subsequent events: Management has evaluated subsequent events through March 29, 2013, which is the date the financial statements were available to be issued.

9

Florida Chemical Company, Inc. and Subsidiaries

Notes to Consolidated Financial Statements - (Continued)

Note 2. Inventories

Inventories consist of the following as of December 31:

	2012			2011
Raw materials	$	929,559		$	1,128,615
Work in process	2,194,296			2,797,119
Finished goods – orange oils, essences and other by-products	7,446,349			18,151,570
	10,570,204			22,077,304
Less inventory reserve for obsolescence	(617,355		)	(573,810		)
	$	9,952,849		$	21,503,494

During the years ended December 31, 2012 and 2011, the Company recorded a lower of cost or market adjustment totaling $45,321 and $998,883, respectively, which is included as a component of cost of sales in the accompanying consolidated statements of income.

Note 3. Property, Plant and Equipment

Property, plant and equipment consist of the following as of December 31:

	2012			2011
Land	$	1,567,395		$	1,567,395
Buildings	2,879,337			2,882,954
Land and building improvements	3,329,167			2,876,372
Machinery and equipment	15,475,042			8,488,164
Furniture and fixtures	879,465			811,505
	24,130,406			16,626,390
Less accumulated depreciation	(4,894,479		)	(3,903,021		)
Plus construction in progress	824,854			3,347,120
	$	20,060,781		$	16,070,489

On October 3, 2011, the Company purchased for cash, land and a building in Winter Haven, Florida from an unrelated third party for $2,439,000.

Depreciation for the years ended December 31, 2012 and 2011, totaled $1,024,129 and $729,815, respectively, of which $342,943 and $253,309, respectively, was capitalized as a component of inventories.

10

Florida Chemical Company, Inc. and Subsidiaries

Notes to Consolidated Financial Statements - (Continued)

Note 4. Long-Term Debt

The Company's long-term debt consists of the following as of December 31:

	2012			2011
Bank note payable with fixed monthly payments of $9,000 including principal and interest at a
fixed rate of 5.93%, due June 12, 2019, collateralized by deposits, building improvements,
equipment and fixtures.	$	579,837		$	650,543
Bank note payable with fixed monthly payments of $17,516 including principal and interest
at a fixed rate of 4.46%, due February 15, 2014, collateralized by building improvements,
equipment and fixtures.	239,100			433,639
Bank note payable with fixed payments of $8,333 per month in principal, plus interest based
on the one-month LIBOR interest rate plus 2.5%, collateralized by real estate. Note was
repaid in full in February 2012.	—			1,316,667
	818,937			2,400,849
Less current portion	(278,758		)	(1,581,911		)
Long-term debt, net of current portion	$	540,179		$	818,938

As of December 31, 2012, aggregate payments required on long-term debt that are due in future years are as follows:

Year ending December 31,
2013	$	278,758
2014	115,358
2015	84,767
2016	89,950
2017	95,566
Thereafter	154,538
	$	818,937

In August 2012, the Company entered into a $5,000,000 bank note with a financial institution having interest only payments at the one-month LIBOR interest rate plus 2.75% and maturing on November 21, 2012. The note was repaid in November 2012.

Note 5. Line of Credit

On September 22, 2011, the Company entered into a $20,000,000 revolving line of credit agreement with a commercial bank. All outstanding principal plus accrued, unpaid interest is due on September 22, 2014, and for each twelve-month period that the revolving line of credit is available, a zero balance shall be maintained for at least one 30 consecutive day period. Interest is payable monthly and accrues at the monthly LIBOR interest rate plus 1.6% (1.81% as of December 31, 2012), plus .15% interest on the unused portion of the revolving line of credit. The revolving line of credit is collateralized by accounts receivable, inventories, and certain other assets of the Company and includes certain financial covenants including a minimum tangible net worth and debt service coverage ratio. Available borrowings under the revolving line of credit totaled $15,050,000 as of December 31, 2011, and $4,950,000 was outstanding on the revolving line of credit as of December 31, 2011. No amounts were outstanding on the revolving line of credit as of December 31, 2012.

Note 6. Related Party Loan Payable

The Company borrowed $400,000 from a relative of one of the stockholders in 1999 with principal due on demand, and fixed interest accruing at 8.75%, payable annually. This loan was subordinated to the revolving line of credit. As of December 31, 2012, the outstanding principal and accrued interest were paid in full.

11

Florida Chemical Company, Inc. and Subsidiaries

Notes to Consolidated Financial Statements - (Continued)

Note 7. Commitments

Lease obligations: The Company leases office equipment under a non-cancelable operating lease with an original term of five years that expires in 2015. Commitments for minimum future rentals, by year and in the aggregate, to be paid under operating leases that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2012 are as follows:

Year ending December 31,
2013	$	33,090
2014	33,090
2015	24,818
	$	90,998

Total rent expense under operating leases totaled approximately $34,000 and $18,000, respectively, for the years ended December 31, 2012 and 2011, which is a component of occupancy expense in the accompanying consolidated statements of income. The Company also has other month-to-month leases under which it pays monthly usage fees to unrelated third parties for chemical storage and gas tank rentals that comprise $124,467 and $141,712 of rent and storage expense within occupancy expense in the accompanying consolidated statements of income during the years ended December 31, 2012 and 2011, respectively.

Note 8. Pension Plan

The Company sponsors a simplified employee pension (SEP) plan covering substantially all of its employees. The Company contributes a percentage of each covered employee's salary. The contribution amount is determined annually by the Board of Directors. Employees are eligible to participate after their third year of service. For the years ended December 31, 2012 and 2011, Company contributions totaled $431,591 and $434,261, respectively. Amounts of $363,634 and $371,170, respectively, are included in compensation and benefits expense in the accompanying consolidated statements of income, net of $67,957 and $63,091, respectively, which was capitalized as a component of inventories during the years ended December 2012 and 2011.

Note 9. Key Man Life Insurance

The Company is the owner and beneficiary of several level term life insurance policies with a total face amount of $70,000,000 as of December 31, 2012, covering the lives of all of the stockholders.

Note 10. Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. As of the years ended December 31, 2012 and 2011, some cash deposits were in excess of federally insured limits. However, the Company has not experienced any losses in such accounts and management believes the Company is not exposed to any significant credit risks on these accounts.

Credit is extended to customers based on an evaluation of the customer's financial condition, and generally collateral is not required. The majority of the Company's sales are credit sales which are made to customers whose ability to pay is dependent upon the industry economics prevailing in the areas where they operate. However, concentration of credit risk with respect to accounts receivable is limited to the large number of customers comprising the Company's customer base that is geographically dispersed throughout the United States of America and internationally and with generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. The Company maintains reserves for potential credit losses, and such losses have been within management's expectations.

During the year ended December 31, 2012, two customers accounted for approximately 23% and 12%, respectively, of total sales and approximately 27% and 10%, respectively, of accounts receivable. As of and for the year ended December 31, 2011, one customer accounted for approximately 17% of total sales and approximately 23% of accounts receivable.

The Company's products are derived primarily from the agricultural industry, which is subject to various factors over which the Company has limited or no control, including weather conditions, disease, and pestilence, water supply, and market price fluctuations. Market prices are sensitive to aggregate domestic and foreign crop sizes, as well as other factors, which have a direct impact on the Company's sales and cost of sales.

12

Florida Chemical Company, Inc. and Subsidiaries

Notes to Consolidated Financial Statements - (Continued)

Note 11. Subsequent Event

In January 2013, the Company declared and paid distributions primarily for individual income tax liabilities in the amount of $400,000 to its stockholders.

13

EX-99.2

Exhibit 99.2

Unaudited Consolidated Financial Statements of Florida Chemical Company, Inc. and Subsidiaries

Florida Chemical Company, Inc. and Subsidiaries

Unaudited Consolidated Financial Statements

Financial Statements
Unaudited Consolidated Balance Sheets at March 31, 2013 and December 31, 2012	2
Unaudited Consolidated Statements of Income for the three months ended March 31, 2013 and 2012	3
Unaudited Consolidated Statements of Comprehensive Income for the three months ended March 31, 2013 and 2012	4
Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012	5
Notes to Unaudited Consolidated Financial Statements	6

Florida Chemical Company, Inc. and Subsidiaries

Unaudited Consolidated Balance Sheets

	March 31, 2013		December 31, 2012
Assets
Current Assets:
Cash	$	216,053	$	2,104,874
Account Receivable, net of allowance for doubtful accounts
of $197,121 and $182,121, respectively	13,979,773		10,051,841
Inventories, net	16,180,345		9,952,849
Prepaid expenses	435,211		469,832
Total current assets	30,811,382		22,579,396
Property, Plant and Equipment, net	19,983,088		20,060,781
Other Assets	225,687		208,080
	$	51,020,157	$	42,848,257
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	13,421,488	$	8,160,284
Accrued pension payable	—		431,591
Accrued salaries payable	688,290		164,614
Customer deposits	227,193		225,166
Line of credit	191,000		—
Current portion of long-term debt	265,343		278,758
Other current liabilities	169,512		93,100
Total current liabilities	14,962,826		9,353,513
Long-Term Debt, net of current portion	485,043		540,179
Total liabilities	15,447,869		9,893,692
Commitments
Stockholders' Equity:
Commons stock, $1 par value, 40,000 shares authorized,
10,000 shares issued and outstanding	10,000		10,000
Additional paid-in capital	151,231		151,231
Retained earnings	35,339,344		32,740,576
Accumulated other comprehensive income	71,713		52,758
Total stockholders' equity	35,572,288		32,954,565
	$	51,020,157	$	42,848,257

See Notes to Unaudited Consolidated Financial Statements.

2

Florida Chemical Company, Inc. and Subsidiaries

Unaudited Consolidated Statements of Income

	Three months ended March 31,
	2013			2012
Sales	$	22,454,027		$	31,260,517
Cost of sales	15,654,518			27,068,687
Gross profit	6,799,509			4,191,830
Other income	14,048			7,892
Operating expenses:
Compensation and benefits	1,370,627			1,384,770
Selling, general and administration	1,167,146			1,151,085
Occupancy	354,897			295,777
Licenses and taxes	189,214			188,931
Insurance	222,038			166,294
Depreciation and amortization	324,709			191,155
Professional fees	135,952			73,560
Other expenses	40,654			8,838
Total operating expenses	3,805,237			3,460,410
Income from operations	3,008,320			739,312
Financial expense:
Interest expense	(9,375		)	(60,232		)
Net income	$	2,998,945		$	679,080

See Notes to Unaudited Consolidated Financial Statements.

3

Florida Chemical Company, Inc. and Subsidiaries

Unaudited Consolidated Statements of Comprehensive Income

	Three months ended March 31,
	2013		2012
Net Income	$	2,998,945	$	679,080
Other comprehensive income
Unrealized gain on investments available for sale	18,955		34,214
Comprehensive income	$	3,017,900	$	713,294

See Notes to Unaudited Consolidated Financial Statements.

4

Florida Chemical Company, Inc. and Subsidiaries

Unaudited Consolidated Statements of Cash Flows

	Three months ended March 31,
	2013			2012
Cash Flows From Operating Activities:
Net income	$	2,998,945		$	679,080
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation	410,361			255,000
Amortization	1,348			2,157
Loss on disposition of equipment	37,398			—
Provision for doubtful accounts	15,000			15,000
Change in working capital components:
(Increase) decrease in assets:
Accounts receivable	(3,942,932		)	(1,591,021		)
Inventories	(6,227,496		)	926,957
Prepaid expenses	34,844			(87,608		)
Other assets	(223		)	600
Increase (decrease) in liabilities:
Accounts payable	5,261,204			3,254,975
Accrued pension payable	(431,591		)	(434,261		)
Accrued salaries payable	523,676			406,779
Customer deposits	2,027			(122,795		)
Other current liabilities	76,412			(17,154		)
Net cash (used in) provided by operating activities	(1,241,027		)	3,287,709
Cash Flows From Investing Activities:
Acquisition of property, plant and equipment	(370,066		)	(1,024,653		)
Net cash used in investing activities	(370,066		)	(1,024,653		)
Cash Flows From Financing Activities:
Net (repayments) borrowings on line of credit	191,000			(1,323,000		)
Repayments on long-term borrowings debt	(68,551		)	(1,381,832		)
Distributions paid to stockholders	(400,177		)	(192,000		)
Net cash used in financing activities	(277,728		)	(2,896,832		)
Net decrease in cash	(1,888,821		)	(633,776		)
Cash:
Beginning of period	2,104,874			960,104
End of period	$	216,053		$	326,328
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	9,587		$	59,798

See Notes to Unaudited Consolidated Financial Statements.

5

Florida Chemical Company, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

Note 1 - Nature of Business and Summary of Significant Accounting Policies

Nature of business: Florida Chemical Company, Inc. (Florida Chemical) was founded in 1942 and pioneered the collection, manufacturing and marketing of d-Limonene. D-Limonene is the major component in citrus peel oil that is collected during the citrus juicing process. Florida Chemical purchases citrus oils from various processors and distills it at its manufacturing plant in Winter Haven, Florida. The resulting products are used for resin, flavor, fragrance, solvent and chemical synthesis applications. Florida Chemical formed two wholly owned subsidiaries, FC Pro, LLC (FC Pro) and FCC International, Inc (FCCI). FC Pro was created to develop bio-based performance products for industry and has a manufacturing plant in Waller, Texas. FCCI was formed to serve as the Company's commission agent for the sale of certain products to export markets.

The Company sells its products both throughout the United States of America and around the world including South America and Europe. Approximately 23% and 30% of the Company's sales during the three months ended March 31, 2013 and 2012, respectively, were to customers in foreign countries.

Basis of presentation: In the preparation of the accompanying unaudited consolidated interim financial statements, certain information and disclosures normally included in comprehensive annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Management believes that the disclosures included in these consolidated interim financial statements are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the audited consolidated financial statements and notes thereto of Florida Chemical Company, Inc. for the year ended December 31, 2012. In the opinion of management, all adjustments necessary to present fairly Florida Chemical Company, Inc.'s financial position as of March 31, 2013, results of operations for the three months ended March 31, 2013 and 2012, and cash flows for the three months ended March 31, 2013 and 2012 have been included. Operating results for any interim period are not necessarily indicative of results that may be expected for the full year.

Reporting entity and principles of consolidation: The consolidated financial statements include the accounts of Florida Chemical Company, Inc. and its wholly owned subsidiaries FC Pro, LLC and FCC International, Inc (collectively, the Company). All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

Recent accounting pronouncements: The Financial Accounting Standards Board (FASB) and other entities issued new or modifications to, or interpretations of, existing accounting guidance during the three months ended March 31, 2013. The Company has considered the new pronouncements that altered accounting principles generally accepted in the United States of America, and other than as disclosed in these notes to the financial statements, does not believe that any other new or modified principles will have a material impact on the Company's reported financial position or operations.

Reclassifications: Certain amounts in the prior period financial statements have been reclassified for comparative purposes to conform with the presentation in the current period financial statements. The results of these reclassifications had no effect on previously reported assets, liabilities, net income or stockholders' equity.

Note 2 - Inventories

Inventories consist of the following:

	March 31, 2013			December 31, 2012
Raw materials	$	891,398		$	929,559
Work in process	2,371,689			2,194,296
Finished goods – orange oils, essences and other by-products	13,534,613			7,446,349
	16,797,700			10,570,204
Less inventory reserve for obsolescence	(617,355		)	(617,355		)
	$	16,180,345		$	9,952,849

6

Florida Chemical Company, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements - (Continued)

Note 3 - Property, Plant and Equipment

Property, plant and equipment consist of the following:

	March 31, 2013			December 31, 2012
Land	$	1,567,395		$	1,567,395
Buildings	2,842,972			2,879,337
Land and building improvements	4,192,912			3,329,167
Machinery and equipment	15,685,406			15,475,042
Furniture and fixtures	882,189			879,465
	25,170,874			24,130,406
Less accumulated depreciation	(5,295,724		)	(4,894,479		)
Plus construction in progress	107,938			824,854
	$	19,983,088		$	20,060,781

Depreciation for the three months ended ended March 31, 2013 and 2012 totaled $410,361 and $255,000, respectively.

Note 4 - Long-Term Debt

The Company's long-term debt consists of the following:

	March 31, 2013			December 31, 2012
Bank note payable with fixed monthly payments of $9,000 including principal and interest,
at a fixed rate of 5.93%, due June 12, 2019, collateralized by deposits,
building improvements, equipment and fixtures.	$	561,348		$	579,837
Bank note payable with fixed monthly payments of $17,516 including principal and interest
at a fixed rate of 4.46%, due February 15, 2014, collateralized by building improvements,
equipment and fixtures.	189,038			239,100
	750,386			818,937
Less current portion	(265,343		)	(278,758		)
Long-term debt, net of current portion	$	485,043		$	540,179

Note 5 - Line of Credit

On September 22, 2011, the Company entered into a $20,000,000 revolving line of credit agreement with a commercial bank. All outstanding principal plus accrued, unpaid interest is due on September 22, 2014, and for each twelve-month period that the revolving line of credit is available, a zero balance shall be maintained for at least one consecutive 30 day period. Interest is payable monthly and accrues at the monthly LIBOR interest rate plus 1.6% (1.80% as of March 31, 2013), plus 0.15% interest on the unused portion of the revolving line of credit. The revolving line of credit is collateralized by accounts receivable, inventories, and certain other assets of the Company and includes certain financial covenants including a minimum tangible net worth and debt service coverage ratio. Available borrowings under the revolving line of credit totaled $19,809,000 as of March 31, 2013, and $191,000 was outstanding as of March 31, 2013. No amounts were outstanding as of December 31, 2012.

7

Florida Chemical Company, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements - (Continued)

Note 6 - Income Taxes

Under provisions of the Internal Revenue Code, the Company is treated as a Subchapter S-Corporation under the Internal Revenue Code. Under these provisions, the Company does not pay federal or state corporate income taxes on its taxable income because the income is reported on the income tax returns for the stockholders of the Company. Accordingly, the accompanying consolidated financial statements do not contain a provision for income taxes. In addition, management has assessed whether there were any uncertain tax positions, which may give rise to income tax liabilities and determined that there were no such matters requiring recognition in the accompanying financial statements. The Company files income tax returns in the U.S. federal jurisdiction and the States of Illinois, Michigan, New Jersey, Ohio, Georgia and Texas. Generally, the Company is no longer subject to U.S. federal or state and local income tax examinations by tax authorities for years before 2009.

Note 7 - Major Customers

During the three months ended March 31, 2013, one customer accounted for approximately 22% of total sales. During the three months ended March 31, 2012, two customers accounted for approximately 23% and 16%, respectively, of total sales. At March 31, 2013, one customer accounted for approximately 23% of accounts receivable.

Note 8 - Subsequent Event

On May 10, 2013, the Company was acquired by Flotek Industries, Inc. The long-term debt was repaid on May 10, 2013. Also, the line of credit balance was repaid and the line of credit was terminated.

8

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

On May 10, 2013, Flotek Industries, Inc. ("Flotek" or the "Company") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Florida Chemical Company, Inc. ("Florida Chemical") under which Flotek agreed to acquire all of the issued and outstanding shares of common stock of Florida Chemical. The merger was effective May 10, 2013 and Florida Chemical became a wholly-owned subsidiary of Flotek.

The unaudited pro forma condensed combined balance sheet as of March 31, 2013, and the unaudited pro forma condensed combined statements of income for the year ended December 31, 2012 and the three months ended March 31, 2013 are based on the historical consolidated financial statements of Flotek and Florida Chemical. These unaudited pro forma condensed combined financial statements reflect the merger and related events using the acquisition method of accounting and apply the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined balance sheet as of March 31, 2013 reflects the merger and related events as if they had been consummated on March 31, 2013. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2012 and the three months ended March 31, 2013, reflect the merger and related events as if they had been consummated on January 1, 2012.

The pro forma adjustments are based upon available information and assumptions that the managements of Flotek and Florida Chemical believe reasonably reflect the merger and that can be factually supported within the SEC regulations covering the preparation of pro forma financial statements.

The unaudited pro forma condensed combined financial statements and related notes are presented for informational purposes only and do not purport to represent the financial position or results of operations as if the transactions had occurred on the dates discussed above. They also do not project or forecast the consolidated financial positions or results of operations for any future date or period. The unaudited pro forma condensed combined financial statements and related notes should be read together with:

• the separate historical audited financial statements of Flotek as of and for the year ended December 31, 2012 included in Flotek's Annual Report on Form 10-K for the year ended December 31, 2012;

• the separate historical unaudited financial statements of Flotek as of and for the three months ended March 31, 2013 included in Flotek's Quarterly Report on Form 10-Q for the three months ended March 31, 2013;

• the separate historical audited consolidated financial statements of Florida Chemical as of and for the year ended December 31, 2012, which are included as Exhibit 99.1 to this Current Report on Form 8K/A; and

• the separate historical unaudited consolidated financial statements of Florida Chemical as of and for the three months ended March 31, 2013, which are included as Exhibit 99.2 to this current Report on Form 8K/A.

1

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

March 31, 2013

(In thousands)

	Flotek Industries, Inc.			Florida Chemical Company, Inc.		Pro Forma Adjustments				Pro Forma Combined
ASSETS
Current assets:
Cash	$	248		$	216	$	—			$	464
Accounts receivable	46,167			13,980		(3,313		)	(a)	56,834
Inventories	44,836			16,180		—				61,016
Deferred tax assets	1,280			—		—				1,280
Other current assets	2,839			435		—				3,274
Total current assets	95,370			30,811		(3,313		)		122,868
Property, plant and equipment, net	57,158			19,983		106			(c)	77,247
Goodwill	26,943			—		39,728			(d)	66,671
Deferred tax assets, net	15,381			—		320			(e)	15,701
Other intangible assets, net	23,631			—		56,020			(f)	79,651
Other assets	—			226		—				226
Total Assets	$	218,483		$	51,020	$	92,861			$	362,364
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	18,565		$	13,421	$	(3,313	)	(a)	$	28,673
Accrued liabilities	6,764			1,276		—				8,040
Income taxes payable	3,038			—		—				3,038
Current portion of long-term debt	5,432			266		28,554			(g) (h)	34,252
Total current liabilities	33,799			14,963		25,241				74,003
Long-term debt, less current portion	21,673			485		24,515			(g) (h)	46,673
Deferred tax liabilities, net	394			—		25,966			(e)	26,360
Total liabilities	55,866			15,448		75,722				147,036
Stockholders’ equity:
Common stock	5			10		23			(i)	38
Additional paid-in capital	200,642			151		52,527			(i)	253,320
Accumulated other comprehensive income (loss)	(60		)	72		(72		)	(i)	(60		)
Retained earnings (accumulated deficit)	(29,254		)	35,339		(35,339		)	(i)	(29,254		)
Treasury stock	(8,716		)	—		—				(8,716		)
Total stockholders’ equity	162,617			35,572		17,139				215,328
Total Liabilities and Stockholders' Equity	$	218,483		$	51,020	$	92,861			$	362,364

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

2

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

For the Year Ended December 31, 2012

(In thousands, except per share data)

	Flotek Industries, Inc.			Florida Chemical Company, Inc.			Pro Forma Adjustments				Pro Forma Combined
Revenue	$	312,828		$	102,686		$	(23,728	)	(b)	$	391,786
Cost of revenue	181,209			80,381			(23,728		)	(b)	237,862
Gross margin	131,619			22,305			—				153,924
Expenses:
Selling, general and administrative	66,415			12,747			636			(j)	79,798
Depreciation and amortization	4,410			702			2,417			(k)	7,529
Research and development	3,182			—			—				3,182
Gain on disposal of long-lived assets	(1,009		)	—			—				(1,009		)
Total expenses	72,998			13,449			3,053				89,500
Income from operations	58,621			8,856			(3,053		)		64,424
Other income (expense):
Loss on extinguishment of debt	(7,257		)	—			—				(7,257		)
Change in fair value of warrant liability	2,649			—			—				2,649
Interest income (expense), net	(8,103		)	(112		)	991			(l)	(7,224		)
Other income (expense), net	(452		)	21			—				(431		)
Total other income (expense)	(13,163		)	(91		)	991				(12,263		)
Income before income taxes	45,458			8,765			(2,062		)		52,161
Income tax benefit (expense)	4,333			—			(2,592		)	(m)	1,741
Net income	$	49,791		$	8,765		$	(4,654	)		$	53,902
Earnings per common share:
Basic	$	1.03									$	1.05
Diluted	$	0.97									$	0.98
Weighted average common shares:
Basic	48,185									(n)	51,469
Diluted	53,554									(n)	56,838

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

3

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

For the Three Months Ended March 31, 2013

(In thousands, except per share data)

	Flotek Industries, Inc.			Florida Chemical Company, Inc.			Pro Forma Adjustments				Pro Forma Combined
Revenue	$	78,243		$	22,454		$	(5,213	)	(b)	$	95,484
Cost of revenue	45,613			15,654			(5,213		)	(b)	56,054
Gross margin	32,630			6,800			—				39,430
Expenses:
Selling, general and administrative	18,017			3,440			159			(j)	21,616
Depreciation and amortization	1,190			325			687			(k)	2,202
Research and development	875			—			—				875
Total expenses	20,082			3,765			846				24,693
Income from operations	12,548			3,035			(846		)		14,737
Other income (expense):
Interest income (expense), net	(434		)	(9		)	267			(l)	(176		)
Other income (expense), net	(112		)	(27		)	—				(139		)
Total other income (expense)	(546		)	(36		)	267				(315		)
Income before income taxes	12,002			2,999			(579		)		14,422
Income tax expense	(4,237		)	—			(936		)	(m)	(5,173		)
Net income	$	7,765		$	2,999		$	(1,515	)		$	9,249
Earnings per common share:
Basic	$	0.16									$	0.18
Diluted	$	0.15									$	0.17
Weighted average common shares:
Basic	48,582									(n)	51,866
Diluted	51,222									(n)	54,506

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

4

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(In thousands, except share data)

Note 1: Basis of Pro Forma Presentation

On May 10, 2013, Flotek Industries, Inc. ("Flotek" or the "Company") entered into an Agreement and Plan of Merger (the"Merger Agreement") with Florida Chemical Company, Inc. ("Florida Chemical") under which Flotek agreed to acquire all of the issued and outstanding shares of common stock of Florida Chemical. The merger was effective May 10, 2013 and Florida Chemical became a wholly-owned subsidiary of Flotek.

The unaudited pro forma condensed combined financial statements and related notes are provided for informational purposes only and do not purport to represent the financial position or results of operations which would actually have been obtained had such transaction been completed as of the date or for the periods presented, or for the financial position or results of operations that may be obtained in the future.

The pro forma adjustments reflect the merger of Flotek and Florida Chemical and related financings. Pro forma adjustments related to the unaudited pro forma condensed combined statements of income give effect to events that are (i) directly attributable to the merger, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined results. Pro forma adjustments related to the unaudited pro forma condensed combined balance sheet give effect to events that are directly attributable to the transaction and factually supportable regardless of whether they have a continuing impact or are nonrecurring.

Total fees and costs of the acquisition include legal, accounting and other fees and costs that have or will be expensed. These charges are directly attributable to the merger and represent non-recurring costs. The anticipated impact on the results of operations, therefore, was excluded from the unaudited pro forma condensed statements of operations.

The unaudited pro forma condensed combined statements of income do not reflect the cost of any integration activities or benefits from the merger and synergies that may be derived from any integration activities, both of which may have a material effect on the consolidated results of operations in periods following the completion of the merger.

Certain amounts in Florida Chemical's historical financial statements have been reclassified to conform to Flotek's presentation.

Note 2: Purchase Price and Purchase Price Allocation

The purchase consideration transferred in the merger is as follows:

Cash	$	49,500
Common stock, 3,284,180 shares	52,711
Repayment of debt	4,227
Total purchase price	$	106,438

The allocation of purchase consideration was based on the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the merger. The allocation of the purchase price was made to major categories of assets and liabilities in the accompanying unaudited pro forma combined financial statements based on management's best estimates, supported by independent third-party analyses, assuming the merger had closed on March 31, 2013 for the unaudited pro forma condensed combined balance sheet purposes and January 1, 2012 for the unaudited pro forma condensed combined statements of income purposes. The excess of the purchase price over the estimated fair value of tangible and identifiable intangible assets acquired and liabilities assumed was allocated to goodwill.

5

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - (CONTINUED)

(In thousands, except share data)

The allocation of the purchase price in the unaudited pro forma condensed combined balance sheet as of March 31, 2013 is as follows:

Cash	$	329
Net working capital, net of cash	15,653
Property, plant and equipment:
Personal property	13,400
Real property	6,750
Other assets	524
Other intangible assets:
Customer relationships	29,270
Trade name	12,670
Proprietary technology	14,080
Goodwill	39,728
Deferred tax impact of valuation adjustment	(25,966		)
Total purchase price allocation	$	106,438

Note 3: Elimination of Accounts and Transactions Between Flotek and Florida Chemical

The elimination of accounts and transactions between Flotek and Florida Chemical are as follows:

(a)    To eliminate the accounts receivable and accounts payable between Flotek and Florida Chemical.

	As of March 31, 2012
	Flotek		Florida Chemical
Accounts receivable	—		(3.313	)
Accounts payable	(3,313	)	—

(b)    To eliminate revenue and cost of revenue amounts between Flotek and Florida Chemical.

	For the Year Ended				For the Three Months Ended
	December 31, 2012				March 31, 2013
	Flotek		Florida Chemical		Flotek		Florida Chemical
Revenues	—		(23,728	)	—		(5.213	)
Cost of revenue	(23,728	)	—		(5,213	)	—

Note 4: Pro Forma Adjustments

The pro forma adjustments included in the unaudited pro forma condensed financial statements are as follows:

(c) To record the estimated fair value of Florida Chemical's property, plant and equipment in excess of its book value.

(d) To record the estimated amount of goodwill.

(e) To record the estimated deferred tax asset (current) for acquired tax benefits related to Florida Chemical's allowance for doubtful accounts and inventory obsolescence reserve expected to be realized in the future.

To record the assumed deferred tax liability (non-current) for the difference between the assigned fair values of the tangible and intangible assets acquired and the tax bases of those assets.

The deferred tax amounts have been recognized at an estimated statutory rate of 38.7%.

(f) To record the estimated fair value of Florida Chemical’s identifiable intangible assets.

(g) To eliminate Florida Chemical's debt which was paid at the date of the merger.

(h) To record the increase in borrowings of current and non-current debt to finance the merger. Line of credit advances are reported as current and the term loan is split between current and long-term based on its scheduled maturities.

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - (CONTINUED)

(In thousands, except share data)

(i) To record the common stock par value and additional paid-in capital for the value of the 3,284,180 shares issued in the merger.

To eliminate Florida Chemical’s historical stockholders equity.

(j) To record stock-based compensation for restricted stock awards granted to Florida Chemical management and employees, net of estimated forfeitures, for the year ended December 31, 2012 and the three months ended March 31, 2013.

(k) To reverse the historical depreciation expense of Florida Chemical and record depreciation expense on the new fair value basis of property, plant and equipment for the year ended December 31, 2012 and three months ended March 31, 2013.

To record amortization of the acquired intangible assets which have finite lives over their estimated useful lives for the year ended December 31, 2012 and three months ended March 31, 2013.

(l) To record interest expense for the increased long-term debt and revolving line of credit borrowings required for the merger.

To eliminate the historical interest expense that was incurred on Florida Chemical’s debt that was paid at the date of the merger.

The interest expense on the new borrowings was calculated using current interest rates without giving consideration to the variable interest rates on the debt.

(m) To record the provision for income tax expense based upon the historical Florida Chemical income before taxes at an estimated statutory rate of 38.7% for the year ended December 31, 2012 and the three months ended March 31, 2013. Prior to the merger, Florida Chemical was treated as an S-Corporation for federal and state income tax purposes, and therefore, its financial statements did not contain a provision for income taxes. The pro forma combined income tax expense does not reflect the amount that would have resulted had Flotek and Florida Chemical filed a consolidated income tax return during the periods presented.

To record the benefit for income tax expense for the pro forma losses at an estimated statutory rate of 38.7% for the year ended December 31, 2012 and the three months ended March 31, 2013.

(n) To reflect the impact on the weighted average shares outstanding used in calculating basic and diluted earnings per share for the issuance of 3,284,180 shares of common stock in the merger for the year ended December 31, 2012 and the three months ended March 31, 2013.

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