Mr. Terence O’Brien

Accounting Branch Chief

Division of Corporate Finance

Securities and Exchange Commission

Washington, D.C. 20549-7010

RE: Flotek Industries, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2006

Filed March 16, 2007

File No. 001-13270

Dear Mr. O’Brien,

We have received your comment letter dated July 19, 2007. Your comments are presented below followed by Flotek’s response to each comment.

Results of Operations, page 20

1. In consideration that your effective tax rate was 36.7%, 17.6%, and 9.0% in the years 2006, 2005, and 2004, respectively, please revise your income tax expense discussion in future filings to specifically disclose and quantify the reasons for the fluctuations in your income tax expense year over year. Your current disclosure that the significant increase in taxes is a result of an increase in your projected federal statutory rate based on estimated income levels, and an increase in your estimated state income tax liability appears general in nature and may not provide investors with a complete understanding of the specific factors that impacted your income tax fluctuations.

Flotek Response:

We will revise our income tax expense discussion in Management’s Discussion and Analysis of Financial Condition and Results of Operations in future filings beginning June 30, 2007 to specifically disclose and quantify the reasons for the fluctuations in our income tax expense and effective tax rate period over period.

Contractual Obligations, page 27

2. Please include your interest commitments under your interest-bearing debt in this table, or provide textual discussion of this obligation below the table. If you provide a textual discussion, the discussion should quantify the interest payments using the same time frames stipulated in the table. Refer to footnote 46 to Release 33-8350

“Interpretation: Commission Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Flotek Response:

We will revise our Contractual Obligations table in future filings to include interest commitments under our interest-bearing. As of December 31, 2006 the Company had the following contractual obligations:

	Payments Due by Period
	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
	(in thousands)
Long-term debt obligations	$	10,066	$	2,308	$	6,259	$	1,499	$	—
Interest obligations related to long-term debt		1,896		779		980		137		—
Capital lease obligations		708		281		421		6		—
Interest obligations related to capital leases		95		57		38		—		—
Operating lease obligations		1,381		475		569		316		21
Royalty obligation		6,300		400		800		800		4,300
Total	$	20,446	$	4,300	$	9,067	$	2,758	$	4,321

Consolidated Statements of Income and Comprehensive Income, page 34

3. We note the following about your operations:

• Within your chemicals and logistics segment, as disclosed on page 2, your specialty chemical division offers a full spectrum of oilfield specialty chemicals and your logistics division designs, project manages and operates automated bulk material handling and loading facilities.

• Further on page 2, you disclose that your drilling products segment manufacturers, sells, rents, and inspects specialized equipment.

• As disclosed on page 56, you have implemented a new software package to better monitor your drilling tool rental activities.

• In your Form 8-K that was filed on March 20, 2007 that contained the financial statements of Triumph Drilling Tools, you disclose on page 5 that Triumph is a leading regional provider of down-hole rental equipment.

In future filings, please revise your consolidated statements of income to separately present your revenue by net sales of tangible products, income from rentals, and revenues from services, and separately present the corresponding cost of tangible goods sold, expenses applicable to rental income, and cost of services. Refer to Rule 5-03(1)&(2) of Regulation
S-X.

Flotek Response:

We will revise our consolidated statements of income beginning June 30, 2007 to separately present our revenue by net sales of tangible products, income from rentals, and revenues from services, and separately present the corresponding cost of tangible goods sold, expenses applicable to rental income, and cost of services.

Note 3 – Acquisitions, page 41

4. We note your acquisitions of Can-Ok, Total Well Solutions, LLC, and LifTech, LLC during 2006. Please provide to us with your significance tests of Rules 1-02(w) and 3-05 of Regulation S-X in determining the need for providing financial statements related to these acquisitions. We may have additional comments after reviewing your response.

Flotek Response:

For all acquisitions a determination of significance is made by comparing the most recent financial statements of the business acquired to Flotek’s most recent annual consolidated financial statements filed with the SEC at or prior to the date of the acquisition. For each acquisition three tests are performed:

Investment Test = total cost of acquisition / total assets of Flotek

Asset Test = total assets of acquisition / total assets of Flotek

Income Test = pretax income of acquisition / pretax income of Flotek

The results of the significance tests for the three acquisitions completed in 2006 are summarized:

Significance Tests on an Individual Basis
Business Acquired	Investment Test		Asset Test		Income Test
Can-Ok	14.0	%	5.3	%	5.9	%
TWS	9.3	%	3.7	%	2.6	%
LifTech	9.9	%	4.9	%	9.7	%
Significance Tests for Individually Immaterial Acquisitions on a Combined Basis
Business Acquired	Investment Test		Asset Test		Income Test
Can-Ok	14.0	%	5.3	%	5.9	%
TWS	9.3	%	3.7	%	2.6	%
LifTech	9.9	%	4.9	%	9.7	%
	33.3	%	14.0	%	18.2	%

5. In addition, in light of your three acquisitions in 2006, please tell us your considerations of providing pro forma financial information pursuant to paragraph 54 of SFAS141.

Flotek Response:

Based on our evaluation, pro forma financial information is not required for the three acquisitions on an individual basis because no significance test exceeded 20%. In addition, we evaluated the significance of the three acquisitions in aggregate and determined pro forma financial information is not required for the acquisitions because on an aggregate basis no significance test exceeded 50%.

6. Based on your disclosures on page 43, we note that you have allocated 2.7%, 3.3%, and 2.8% of total assets acquired to intangible and other assets, respectively, for your acquisitions of Can-Ok, Total Well Solutions, LLC, and LifTech, LLC. We further note the following:

• Your discussion of the significance of your intellectual property on page 3.

• In your asset purchase agreement of Can-Ok Field Services, Inc. filed as Exhibit 10.1 to your Form 10-Q for the quarter ended March 31, 2006, specifically Section 1.1, the agreement states that you have acquired, among other assets, the rights of the Company under the operating agreements, all of the customer lists and customer files, and all of the rights to use the trade name Can-Ok.

• Similarly, in the asset purchase agreement of Stabilizer Technology, Inc. filed as Exhibit 10.2 of your Form 10-Q for the quarter ended March 31, 2006, the agreement states you have acquired, among other assets, the rights of the Company under the operating agreements, all of the customer lists and customer files, and all of the rights to use the trade name Stabilizer Technology.

• You disclose on page 43 that in addition to acquiring tangible assets in the Total Well Solutions acquisition, you licensed the rights to exercise the exclusive worldwide rights to a patented gas separator used in coal bed methane production.

• Based on the asset purchase agreement contained at Exhibit 10.1 to your Form 10-Q for the quarter ended June 30, 2006, it appears you also acquired various intellectual property rights, that includes among other items, trademarks, service marks, trade names, and copyrights. You further obtained leasehold rights and all of the customer lists and customer files.

• The asset purchase agreement contained at Exhibit 10.3 to your Form 10-Q for the quarter ended June 30, 2006, related to the acquisition of LifTech, LLC also appears to provide you with similar intangible assets, including leasehold rights, all of the customer lists and customer files and all of the rights to use the trade name.

In light of the above, it is unclear to us why you have not allocated more of the total assets acquired to intangible assets. Pursuant to paragraphs 39 and A10 through A28 of SFAS 141, please explain to us your analysis to allocate significant amounts of your assets acquired to goodwill as opposed to allocating amounts to intangible assets.

Flotek Response:

For acquisitions we evaluate the initial purchase price allocation and adjust the allocations as additional information relative to the fair market values of the assets and liabilities of the business becomes known. As part of this process we have been working with a third party valuation consultant to estimate the value of intangible assets acquired. We have revised the estimated fair value of intangible assets acquired as of June 30, 2007.

Note 13 – Commitments and Contingencies, page 52

7. We note your disclosure that the company is involved, on occasion, in routine litigation incidental to your business. Please expand your discussion of contingent liabilities to provide the disclosure required by SFAS 5. Clarify whether you believe it is probable, reasonably possible or remote that losses could be material from your

exposure to litigation, potential environmental liabilities and other matters. If reasonably possible, we would expect more detailed and specific disclosures concerning specific contingencies, rather than generalized risk disclosures.

Flotek Response:

The company was not involved in any litigation as of December 31, 2006 through the date of our 10-K filing on March 16, 2007. In future filings we will expand our disclosure for specific contingencies as necessary. We will expand our disclosure beginning June 30, 2007 to clarify our potential contingent liabilities as follows:

“The Company is involved, on occasion, in routine litigation incidental to our business. The Company believes that the ultimate resolution of those routine litigations that may develop will not have a material adverse impact on the Company’s financial position, results of operation or cash flows.”

Note 14 – Segment Information, page 53

8. We note that you currently disclose three reportable segments; Chemicals and Logistics, Drilling Products, and Artificial Lift. In consideration that sales in your Chemicals and Logistics segment represented 50% of your total consolidated net revenue for the year ended December 31, 2006, we note the following:

• You disclose on page 2 that your specialty chemical division offers a full spectrum of oilfield specialty chemicals used for drilling, cementing, stimulation, and production.

• Also on page 2, you disclose that your logistics division designs, project manages and operates automated bulk material handling and loading facilities for oilfield service companies.

• Revenue in your chemicals and logistics segment has grown from $18 million in 2004 to $50.5 million in 2006.

• In your discussion of results by segment on page 23, you disclose that $17.8 million of the total $20.9 million revenue increase in your chemicals and logistics segment is from sales of your proprietary biodegradable environmentally benign green chemicals. You further disclose that margins continue to increase as you focus on shifting more of your sales mix to higher margin patented and proprietary products.

• We further note on your website that you continue to separately present 4 companies under your Companies section, including CESI Chemical and MTI.

In light of these disclosures, it is unclear to us how you have determined to aggregate your specialty chemicals and logistics operations into one reportable segment. Please identify for us your operating segments pursuant to paragraph 10 of SFAS 131. As part

of your response, please identify your chief operating decision maker and provide us with copies of the relevant financial reports reviewed by your chief operating decision maker covering the years ended 12/31/06 and 12/31/05.

Please also tell us in detail how you determined that your operating segments met each of the criteria in paragraph 17 of SFAS 131 for aggregation. To the extent you are aggregating operating segments because you believe your segments are economically similar, please provide us with an analysis that includes historical revenues, gross profits, gross profit margins, operating profits, and operating profit margins, along with any other information you believe would be useful for each of your operating segments to help us understand how these operations are economically similar. Please also address any differences in the trends these financial indicators depict (e.g. if operating income is decreasing for one operation and increasing for another).

Flotek Response:

In accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, we determine segmentation based on our internal organization and reporting of discrete financial information based upon generally accepted accounting methods.

Please see the attached organizational chart below, which shows how our division presidents and vice presidents are aligned to the CEO. The four group presidents/vice presidents and the CEO constitute our chief operating decision makers.

We aggregate our specialty chemicals and logistics operations into one division because they are related businesses operationally, managed by the same chief operating decision maker and market to the same type of customer. Both the specialty chemical division and our logistics division blend products used by oilfield service companies when drilling and cementing a well. The chemical operations develop, blend and market specialty chemicals used in oil and gas well cementing, stimulation, acidizing, drilling, and production treatment. The logistics operations provide bulk blending and transload services used in oil and gas well cementing. The logistics operations also provide transload facility management services.

On a monthly basis the following discrete financial information is reported and reviewed with each chief operating decision maker. Please see the relevant financial reports reviewed by your chief operating decision maker covering the years ended 12/31/06 and 12/31/05 (Attachment A):

• Flotek Chemical and Logistics Operating Results by Quarter and YTD

• CESI Consolidated Operating Results by Quarter and YTD

• CESI Consolidate Detailed Trend Report by Month

• MTI Consolidated Operating Results by Quarter and YTD

• MTI Consolidated Detailed Trend Report by Month

9. We note your disclosure on page 2 that all three of your segments market products domestically and internationally and your disclosure on page 3 that you have been expanding your international sales efforts and you expect international sales to continue to increase. In future filings, please expand your disclosures to include information about your geographic areas. Refer to paragraph 38 of SFAS 131.

Flotek Response:

We will expand our disclosures to included information about our geographic areas beginning June 30, 2007.

Item 9A. Controls and Procedures, page 56

10. We note that you identified two material weaknesses as a part of management’s assessment of your internal controls over financial reporting. We note your disclosure that as a result of these material weaknesses, you recorded adjustments to your financial statements for the year ended December 31, 2006 that affected several financial statement line items. Please provide us with a schedule of these adjustments.

Clearly explain the reason for each adjustment. For each adjustment, show us the impact on pre-tax net loss. Quantify the net effect of all adjustments on pre-tax net income (loss). Also, tell us why none of the adjustments relate to prior periods. Explain in detail why you believe the timing of each adjustment is appropriate and how you determined that the amounts presented in your previously-filed 10-Q’s are appropriate.

Flotek Response:

Please see the attached schedule (Attachment B) which details the adjustments to our financial statements based on our audit for the year ended December 31, 2006, the reason for the adjustment, the impact of the adjustment on pre-tax net income, and the net effect of all adjustments on pretax net income. The audit adjustments were primarily for fourth quarter transactions that did not affect prior quarter presentation.

Signed: /s/ Lisa G. Meier

Lisa G. Meier

Chief Financial Officer

ATTACHMENT A

FLOTEK CHEMICAL & LOGISTICS

For Period Ending December 31, 2006

(In thousands)

TOTAL	Q406			Q306			$		%		Q406			Q405			$		%		YTD Act.			YTD Plan			$			%
Revenue	$	18,557		$	13,607		$	4,950	36	%	$	18,557		$	8,666		$	9,891	114	%	$	50,546		$	36,625		$	13,921		38	%
Cost of goods		9,241			6,699			2,542	38	%		9,241			4,734			4,507	95	%		25,639			19,540			6,099		31	%
Direct costs		703			658			45	7	%		703			420			283	67	%		2,487			2,717			(230	)	-8	%
Gross Margin		8,613			6,250			2,363	38	%		8,613			3,512			5,101	145	%		22,420			14,368			8,052		56	%
Gross Margin  %		46.4	%		44.2	%						46.4	%		40.5	%						44.4	%		39.2	%
Field indirect		1,815			1,476			339	23	%		1,815			824			991	120	%		5,571			4,081			1,490		37	%
Field indirect  %		9.8	%		10.8	%						9.8	%		9.5	%						11.0	%		11.1	%
Field Op profit		6,798			4,774			2,024	42	%		6,798			2,688			4,110	153	%		16,849			10,287			6,562		64	%
Field Op profit  %		36.6	%		35.1	%						36.6	%		31.0	%						33.3	%		28.1	%

CESI CONSOLIDATED

For Period Ending December 31, 2006

(In thousands)

	Month				QTD				YTD				QTD		YTD
	Actual		Consol. CESI Plan		Actual		Consol. CESI Plan		Actual		Consol. CESI Plan		2005		2005
Revenue	6,588		2,963		18,043		9,421		48,023		35,034		7,754		26,918
Cost of goods	3,356		1,645		8,985		5,231		24,973		19,454		4,436		15,288
Material Margin	3,232		1,318		9,058		4,190		23,050		15,580		3,318		11,630
Direct costs	163		156		492		468		1,620		1,739		195		914
Gross Margin	3,069		1,162		8,566		3,722		21,430		13,841		3,123		10,716
	46.6	%	39.2	%	47.5	%	39.5	%	44.6	%	39.5	%	40.3	%	39.8	%
Field indirect	662		315		1,716		952		5,149		3,766		729		2,906
Field Op profit	2,407		847		6,850		2,770		16,281		10,075		2,394		7,810
	36.5	%	28.6	%	38.0	%	29.4	%	33.9	%	28.8	%	30.9	%	29.0	%
Capex	229		—		742		9		3,179		2,544

	Balance at 12/31/2006	QTD D at 12/31/2006	YTD D at 12/31/2006	Year over Year D at 12/31/2006
Net inventory	2,756	167	1,092	1,302
Trade AR	10,300	1,799	5,146	4,962

	Division Name:				CESI CONSOLIDATED
	In thousands
	31-Jan-06		28-Feb-06		31-Mar-06		30-Apr-06		31-May-06		30-Jun-06		31-Jul-06		31-Aug-06		30-Sep-06		31-Oct-06		30-Nov-06		31-Dec-06		Total		YTD Plan as of 31-Dec-06
Revenue	2,553		2,190		2,579		2,600		3,336		3,857		3,814		4,384		4,667		5,148		6,307		6,588		48,023		35,034
Total Revenue	2,553		2,190		2,579		2,600		3,336		3,857		3,814		4,384		4,667		5,148		6,307		6,588		48,023		35,034
Cost of sales and service:
Cost of Goods	1,501		1,267		1,470		1,317		1,762		2,079		1,969		2,219		2,404		2,607		3,022		3,356		24,973		19,454
	59	%	58	%	57	%	51	%	53	%	54	%	52	%	51	%	52	%	51	%	48	%	51	%	52	%	56	%
Direct Expense:
Salaries and Benefits	32		34		42		40		49		56		56		64		65		78		73		78		667		567
Occupancy	2		2		2		2		2		5		2		3		3		4		7		5		39		90
Material and Supplies	6		6		11		29		13		14		17		28		19		45		20		33		241		180
Communication	—		—		—		—		—		1		1		—		—		—		—		—		2		12
Equipment and Facilities	23		6		24		7		18		17		39		11		5		12		15		20		197		120
Office Costs	19		19		40		19		19		26		21		22		22		22		21		21		271		300
Auto & Travel	2		6		15		6		4		6		9		8		12		7		14		9		98		120
Entertainment	—		—		—		—		—		1		2		1		1		1		1		1		8		2
Professional Fees	—		—		—		—		—		—		—		—		—		—		—		—		—		—
Research & Development	—		—		—		—		—		—		—		—		—		—		—		—		—		—
Depreciation and Amortization	10		10		10		10		10		10		10		9		6		4		4		9		102		330
Other	1		1		1		—		2		—		—		—		2		1		—		(13	)	(5	)	18
Total Cost of Sales and Service	1,596		1,351		1,615		1,430		1,879		2,215		2,126		2,365		2,539		2,781		3,177		3,519		26,593		21,193
	63	%	62	%	63	%	55	%	56	%	57	%	56	%	54	%	54	%	54	%	50	%	53	%	55	%	60	%
Gross Margin	957		839		964		1,170		1,457		1,642		1,688		2,019		2,128		2,367		3,130		3,069		21,430		13,841
Gross Margin  %	37	%	38	%	37	%	45	%	44	%	43	%	44	%	46	%	46	%	46	%	50	%	47	%	45	%	40	%
Field Indirect
Salaries and Benefits	152		126		190		174		191		159		162		167		145		164		221		230		2,081		1,549
Incentive Compensation	17		17		(24	)	17		17		67		17		17		61		17		17		83		323		202
Occupancy	6		3		5		3		3		6		3		3		5		5		3		4		49		42
Material and Supplies	5		14		10		12		7		16		7		20		7		13		12		14		137		110
Communication	9		3		6		7		4		7		5		5		7		5		5		4		67		86
Equipment and Facilities	2		—		1		—		16		—		1		—		—		1		2		—		23		60
Office Costs	16		12		36		26		16		21		19		16		19		27		20		114		342		289
Auto & Travel	10		14		23		15		37		35		19		30		42		21		30		35		311		208
Entertainment	6		6		9		9		8		11		9		17		15		11		14		19		134		90
Professional Fees	24		15		4		30		42		(4	)	57		112		85		87		231		24		707		140
Research & Development	42		43		70		51		37		63		46		51		75		59		61		52		650		803
Depreciation and Amortization	7		6		8		6		11		10		9		9		18		12		12		14		122		114
Other	2		7		10		2		9		17		4		3		76		3		1		69		203		73
Total Field Indirect	298		266		348		352		398		408		358		450		555		425		629		662		5,149		3,766
	12	%	12	%	13	%	14	%	12	%	11	%	9	%	10	%	12	%	8	%	10	%	10	%	11	%	11	%
Field Operating Profit	659		573		616		818		1,059		1,234		1,330		1,569		1,573		1,942		2,501		2,407		16,281		10,075
FOP  %	26	%	26	%	24	%	31	%	32	%	32	%	35	%	36	%	34	%	38	%	40	%	37	%	34	%	29	%
EBITDA	676		588		634		833		1,080		1,255		1,422		1,566		(144	)	1,664		2,130		1,740		13,444		6,710
EBITDA  %	26	%	27	%	25	%	32	%	32	%	33	%	37	%	36	%	-3	%	32	%	34	%	26	%	28	%	19	%

MTI

For Period Ending December 31, 2006

(In thousands)

	Month				QTD				YTD				QTD		YTD
	Actual		Plan		Actual		Plan		Actual		Plan		2005		2005
Revenue	101		133		514		373		2,523		1,591		912		2,720
Cost of goods	43		—		256		—		666		86		298		704
Material Margin	58		133		258		373		1,857		1,505		614		2,016
Direct costs	64		82		211		246		867		978		225		1,030
Gross Margin	(6	)	51		47		127		990		527		389		986
	-5.9	%	38.3	%	9.1	%	34.0	%	39.2	%	33.1	%	42.7	%	36.3	%
Field indirect	31		26		99		79		422		315		95		356
Field Op profit	(37	)	25		(52	)	48		568		212		294		630
	-36.6	%	18.8	%	-10.1	%	12.9	%	22.5	%	13.3	%	32.2	%	23.2	%
Capex	—		—		—		—		43		50

	Balance at 12/31/2006	QTD D at 12/31/2006		YTD D at 12/31/2006		Year over Year D at 12/31/2006
Net inventory	—	—		—		—
Trade AR	274	(295	)	(282	)	(271	)

	Division Name:				MTI
	In thousands
	31-Jan-06		28-Feb-06		31-Mar-06		30-Apr-06		31-May-06		30-Jun-06		31-Jul-06		31-Aug-06		30-Sep-06		31-Oct-06		30-Nov-06		31-Dec-06		Total		YTD Plan as of 31-Dec-06
Revenue	142		126		286		166		266		281		264		245		233		292		121		101		2,523		1,591
Total Revenue	142		126		286		166		266		281		264		245		233		292		121		101		2,523		1,591
Cost of sales and service:
Cost of Goods	—		52		114		2		66		69		67		37		3		211		2		43		666		86
	0	%	41	%	40	%	1	%	25	%	25	%	25	%	15	%	1	%	72	%	2	%	43	%	26	%	5	%
Direct Expense:
Salaries and Benefits	54		46		29		41		39		38		37		47		38		43		44		40		496		587
Occupancy	6		7		4		5		5		5		5		7		6		5		3		4		62		84
Material and Supplies	6		5		10		2		9		7		3		6		12		10		4		2		76		84
Communication	—		—		—		—		—		—		—		—		—		—		—		—		—		1
Equipment and Facilities	4		—		3		2		2		2		2		2		4		2		3		—		26		42
Office Costs	4		4		5		4		4		4		4		4		4		4		4		4		49		21
Auto & Travel	3		3		—		—		(2	)	—		—		—		—		—		—		—		4		11
Entertainment	—		—		—		—		—		—		—		—		—		—		—		—		—		1
Professional Fees	—		—		—		—		—		—		—		—		—		—		—		—		—		—
Research & Development	—		—		—		—		—		—		—		—		—		—		—		—		—		—
Depreciation and Amortization	13		13		13		13		13		13		13		13		13		13		13		13		156		147
Other	(1	)	(1	)	1		—		—		(1	)	(1	)	2		(1	)	(2	)	1		1		(2	)	—
Total Cost of Sales and Service	89		129		179		69		136		137		130		118		79		286		74		107		1,533		1,064
	63	%	102	%	63	%	42	%	51	%	49	%	49	%	48	%	34	%	98	%	61	%	106	%	61	%	67	%
Gross Margin	53		(3	)	107		97		130		144		134		127		154		6		47		(6	)	990		527
Gross Margin  %	37	%	-2	%	37	%	58	%	49	%	51	%	51	%	52	%	66	%	2	%	39	%	-6	%	39	%	33	%
Field Indirect
Salaries and Benefits	21		16		14		18		17		17		16		18		16		15		14		15		197		147
Incentive Compensation	3		3		(7	)	3		3		13		3		3		12		3		3		2		44		40
Occupancy	4		4		4		4		4		4		4		4		4		4		3		4		47		40
Material and Supplies	1		1		1		3		3		5		2		1		1		1		1		1		21		15
Communication	1		1		2		1		1		1		1		1		1		1		1		1		13		9
Equipment and Facilities	—		—		—		—		—		—		—		—		—		—		(1	)	—		(1	)	2
Office Costs	2		3		4		3		2		10		2		3		2		2		2		8		43		24
Auto & Travel	—		—		4		(1	)	—		1		—		—		1		1		—		—		6		10
Entertainment	—		—		—		—		—		—		—		—		—		—		—		—		—		1
Professional Fees	—		—		—		—		—		—		—		—		—		—		—		—		—		—
Research & Development	—		—		—		—		—		—		—		—		—		—		—		—		—		—
Depreciation and Amortization	1		1		1		1		1		2		2		2		2		2		2		2		19		7
Other	1		1		3		1		1		2		1		1		10		8		6		(2	)	33		20
Total Field Indirect	34		30		26		33		32		55		31		33		49		37		31		31		422		315
	24	%	24	%	9	%	20	%	12	%	20	%	12	%	13	%	21	%	13	%	26	%	31	%	17	%	20	%
Field Operating Profit	19		(33	)	81		64		98		89		103		94		105		(31	)	16		(37	)	568		212
FOP  %	13	%	-26	%	28	%	39	%	37	%	32	%	39	%	38	%	45	%	-11	%	13	%	-37	%	23	%	13	%
EBITDA	33		(20	)	94		79		113		104		118		109		(2	)	(33	)	23		(44	)	574		191
EBITDA  %	23	%	-16	%	33	%	48	%	42	%	37	%	45	%	44	%	-1	%	-11	%	19	%	-44	%	23	%	12	%

Attachment B

Flotek Industries, Inc.

Summary of Audit Adjustments to Trial Balance

For the Year Ended December 31, 2006

Adjusting Journal Entries #1
To book underaccrual of sales taxes.
526900    Other Expenses	$	13,324
213050    Sales Tax Payable			$	13,324
Total	$	13,324	$	13,324
Adjusting Journal Entries #2
To accrue for 2006 Doherty and Doherty legal fees.
145010    Prepaid Expenses—Other	$	16,008
726012    Legal Expense	$	10,304
212103    Accrued Legal Expense			$	26,312
Total	$	26,312	$	26,312
Adjusting Journal Entries #3
To adjust Flotek Pump Service inventory balance to quantity observed during inventory.
132001    Inventory in transit	$	47,383
524010    Inventory Adjustment			$	47,383
Total	$	47,383	$	47,383
Adjusting Journal Entries #4
To accrue unbilled LOR (downhole tool) revenue.
121002    Unbilled A/R	$	192,376
411000    Revenue—Rentals			$	100,203
490001    Miscellaneous Income			$	92,173
Total	$	192,376	$	192,376
Adjusting Journal Entries #5
To reclassify AR trade customers with credit balances to AP.
121900    Accrued Accounts Receivable	$	104,076
212120    Accrued Other (Liability)			$	104,076
Total	$	104,076	$	104,076
Adjusting Journal Entries #6
To recognize inventory shipped FOB shipping point by a vendor in December 2006.
132001    Inventory in transit	$	827,512
212120    Accrued Other (Liability)			$	827,512
Total	$	827,512	$	827,512
Effect on Income before Taxes			$	216,131