On August 11, 2009, Flotek Industries, Inc. (the "Company") entered into separate unit purchase agreements (the "Purchase Agreements") with certain accredited investors (the "Purchasers") pursuant to which the Company agreed to sell in a private placement an aggregate of 16,000 units (the "Units") at a purchase price of $1,000 per Unit, yielding aggregate gross proceeds of approximately $16,000,000. Each Unit is comprised of (i) one share of cumulative redeemable convertible preferred stock of the Company (the "Preferred Stock"),
(ii) warrants to purchase up to 155 shares of common stock of the Company (the "Common Stock") at an exercise price of $2.31 per share (the "$2.31 Warrants") and (iii) contingent warrants to purchase up to 500 shares of Common Stock of the Company at an exercise price of $2.45 per share (the "Contingent Warrants" and together with the $2.31 Warrants, the "Warrants"). For a summary of the terms of the Preferred Stock and the Warrants, please see "The Preferred Stock" and "The Warrants," below. There are no material relationships between the Company the Purchasers other than in respect of the Purchase Agreements.

The closing of the sale of the Units in the private placement is expected to occur on August 11, 2009.

The Purchase Agreements contain representations and warranties, covenants and indemnification provisions that are typical for private placements by public companies, including representations and warranties regarding: (1) due incorporation, valid existence and good standing; (2) capitalization;
(3) reservation of shares of Common Stock for the conversion and exercise of the Preferred Stock and the $2.31 Warrants; (4) right, corporate power and authority to enter into the Purchase Agreements; (5) legal proceedings; (6) tax matters;
(7) "investment company" status; (8) insurance; (9) use of proceeds from the offering; (10) financial statements; (11) New York Stock Exchange listing compliance; (12) internal accounting controls and disclosure controls and procedures (including an exception disclosing that the Company is currently investigating a series of potential thefts by an employee occurring over several quarters that are currently expected to amount to losses ranging from $100,000 to $200,000, in the aggregate, and in connection with such investigation the Company is strengthening its oversight and internal controls relating primarily to travel and expense reimbursements); (13) labor matter and (14) the amendment to the Company's credit facility.

Pursuant to the Purchase Agreements, the Company has agreed to file with the Securities and Exchange Commission (the "SEC") a registration statement with respect to the resale of the Common Stock underlying the $2.31 Warrants and up to 75% of the shares of Common Stock issuable upon conversion of the Preferred Stock (allocated pro rata among the Purchasers) purchased by the Purchasers under the Purchase Agreements as soon as reasonably practicable, and in no event more than 10 business days following the closing of the offering. Furthermore, the Company has agreed to file with the SEC a registration statement with respect to the resale of the Common Stock underlying the Contingent Warrants purchased by the Purchasers under the Purchase Agreements as soon as reasonably practicable, and in no event more than 10 business days following the later of
(1) the date on which the Company's stockholders have approved (i) the amendment to the Company's certificate of incorporation to increase the authorized shares of Common Stock of the Company from 40,000,000 shares to not less than 80,000,000 shares (the "Charter Amendment") and (ii) the Contingent Warrants and
(2) the earlier of (A) the six-month anniversary of the closing of the offering and (B) the date on which the aggregate market value of the Common Stock held by non-affiliates of the Company is $75 million or more (and if such stockholder approval occurs after such date, the aggregate market value of the Common Stock held by non-affiliates of the Company has been $75 million or more at a date within 45 days prior to such stockholder approval).

Neither the Units, the shares of Preferred Stock, the Warrants nor the Common Stock underlying such securities have been registered under the Securities Act of 1933, as amended (the "Securities Act"), and such securities may not be offered or sold in the United States absent a registration statement or exemption from registration.

On August 11, 2009, the Company and Jerry D. Dumas, Chairman of the Board of . . .

The information in Item 1.01 above regarding the Credit Agreement Amendment is incorporated into this Item 2.03 by reference.

As described in Item 1.01 above, pursuant to the Purchase Agreements, the Company has agreed to sell Units to the Purchasers in a private placement. The offer and sale of Units is being made in reliance on an exemption from registration under the Securities Act pursuant to Section 4(2) of the Securities Act and Regulation D promulgated thereunder. The terms of the conversion of the Preferred Stock and exercise of the Warrants are set forth in Item 1.01 above. The information in Item 1.01 above is incorporated into this Item 3.02 by reference.

Jerry D. Dumas, Sr., Chairman of the Board, Chief Executive Officer and President of the Company, has informed the Company that he will be retiring from such positions. The Company entered into a Retirement Agreement with Mr. Dumas on August 11, 2009 which sets forth the terms pursuant to which Mr. Dumas will step down as an officer of the Company and assist in the transition of his duties to his successor.

Pursuant to this Retirement Agreement, the Company and Mr. Dumas have agreed that: (i) Mr. Dumas will remain as Chief Executive Officer and President of the Company until the earlier of the date of the election of his replacement or January 1, 2010, (ii) Mr. Dumas will remain as Chairman of the Board and a director of the Company until the Company's 2010 annual stockholders' meeting,
(iii) Mr. Dumas will remain as an employee of the Company through June 30, 2010,
(iv) Mr. Dumas will agree to perform throughout the term of his employment such duties as shall be assigned to him by the Board, which duties will not exceed the scope of the responsibilities of the Chief Executive Officer or President of the Company, and (v) Mr. Dumas will agree to assist in the transition of his duties as the Chief Executive Officer and President of the Company to his successor for three months after any such successor is elected.

The Company has agreed pursuant to the Retirement Agreement to: (i) pay to Mr. Dumas his annual salary of $450,000 through June 30, 2010, (ii) pay Mr. Dumas a one-time payment of $225,000 on June 30, 2010, and (iii) accelerate the vesting of any of Mr. Dumas' unvested equity awards on June 30, 2010.

The Retirement Agreement provides generally for the release by Mr. Dumas and the Company of each other against all claims, known or unknown. However, because of the requirements of federal law, the Retirement Agreement provides that the release by Mr. Dumas of the Company of any potential age discrimination claims will be delivered at his option within 21 days of the date of the Retirement Agreement. Under federal law, Mr. Dumas is then permitted to revoke this age discrimination release within 7 days of the date of the delivery to the Company. The employment term of Mr. Dumas, the vesting of his equity awards, the payment of certain compensation to Mr. Dumas pursuant to the Retirement Agreement, and the release by the Company of its claims against Mr. Dumas, are all contingent on this age discrimination release being delivered by Mr. Dumas and not being revoked by Mr. Dumas, but the Retirement Agreement itself, including the provisions regarding the resignation of Mr. Dumas, will remain in effect. Thereafter, the vesting of Mr. Dumas' equity awards and the payment of certain compensation to Mr. Dumas pursuant to the Retirement Agreement continue to be contingent on his employment not being terminated for cause.

In connection with John Chisholm providing his services as interim President during the Company's search for a new Chief Executive Officer, the Company and two companies controlled by Mr. Chisholm entered into a Service Agreement, dated as of August 11, 2009, pursuant to which such companies will provide the services of Mr. Chisholm to the Company as interim President. The agreement is terminable by either party upon 30 days' written notice, and will terminate immediately upon the Company's election of a new Chief Executive Officer. The agreement provides that the Company will pay an aggregate of $32,000 per month as consideration for the provision of Mr. Chisholm's services.

On August 11, 2009, the Company and Jesse E. Neyman, Chief Financial Officer, entered into an Employment Agreement pursuant to which Mr. Neyman will continue to serve as Chief Financial Officer of the Company.

The Employment Agreement (i) provides for a term of employment until the earlier of (1) Mr. Neyman's resignation with or without Good Reason (as defined in the Employment Agreement) or Mr. Neyman's death or disability or (2) termination by the Company with or without Cause (as defined in the Employment Agreement);
(ii) provides that, upon termination of Mr. Neyman's employment by the Company without Cause or by Mr. Neyman for Good Reason and subject to the satisfaction of certain other specified conditions, including the execution of a release agreement, Mr. Neyman will be entitled to receive (1) a lump sum payment in an amount equal to one-half of the sum of his annual base salary and target bonus, payable at the end of the month following execution of a release agreement,
(2) monthly payments in an amount equal to one-twelfth of the sum of his annual base salary and target bonus, payable for 13 months following execution of a release agreement, (3) a lump sum payment in an amount equal to five-twelfths of the sum of his annual base salary and target bonus, payable at the end of the fifteenth month following execution of a release agreement, and (4) coverage at the Company's expense under the employee health insurance plan for a period of 24 months following execution of a release agreement; and (iii) contains certain non-solicitation and non-compete restrictions for a period of 24 months following the date of termination of employment with the Company.

Pursuant to the Employment Agreement, Mr. Neyman will earn a new annualized base salary of $250,000. Additionally, Mr. Neyman will be entitled to a bonus payment of $75,000 if he does not resign from his employment with the Company and has not been terminated by the Company for Cause prior to the earlier of the date of the appointment of a new chief executive officer on a basis which is not an interim basis or December 31, 2009. Furthermore, Mr. Neyman will receive a grant of stock options for 150,000 shares pursuant to the Company's Long Term Incentive Plan, which is conditioned upon shareholder approval of the Charter Amendment. The stock options will vest in equal installments over a four-year period. However, if the Charter Amendment has not become effective on or before January 31, 2010, Mr. Neyman will be entitled to receive at his discretion a bonus payment in the amount of $250,000 in lieu of such options. Such awards . . .

On August 11, 2009, the Company announced the entry into the Purchase Agreements. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.

On August 11, 2009 the Company announced the management transition plan pursuant to which Mr. Dumas will retire from his positions with the Company. A copy of the press release is filed as Exhibit 99.2 hereto and is incorporated herein by reference.

This Current Report on Form 8-K contains forward-looking statements (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) regarding the Company's business, financial condition, results of operations and prospects. Words such as expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this press release.

Although forward-looking statements in this Current Report on Form 8-K reflect the good faith judgment of the Company's management, such statements can only be based on facts and factors that the Company's management currently knows. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, demand for oil and natural gas drilling services in the areas and markets in which the Company operates, competition, obsolescence of products and services, the ability to obtain financing to support operations, environmental and other casualty risks, and the effect of government regulation.

Further information about the risks and uncertainties that may affect the Company's business are set forth in the Company's most recent filing on Form 10-K (including, without limitation, in the "Risk Factors" section) and in its other SEC filings and publicly available documents. The Company urges readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report.

(d) Exhibits.

Exhibit
Number    Description
10.1      Form of Unit Purchase Agreement dated as of August 11, 2009

10.2      Third Amendment and Waiver to Credit Agreement dated as of August 6, 2009

10.3      Retirement Agreement with Jerry D. Dumas dated as of August 11, 2009

10.4      Employment Agreement with Jesse E. Neyman dated as of August 11, 2009

10.5      Service Agreement dated as of August 11, 2009

99.1      Press Release regarding private placement of units dated as of August 11,
          2009

99.2      Press Release regarding retirement of Jerry D. Dumas, Sr. dated as of
          August 11, 2009