U.S. Securities and Exchange Commission
                              Washington, D.C. 20549

                                   Form 10-KSB
(Mark One)

[  X   ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
              EXCHANGE ACT OF 1934 [Fee Required]

                   For the fiscal year ended November 30, 1997

[      ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934 [No Fee Required]

            For the transition period from _________________________

                         Commission file number 1-12556

                                TOWER TECH, INC.
                 (Name of small business issuer in its charter)

         Oklahoma                                      73-1210013
       (State or other jurisdiction of         (IRS Employer Identification No.)
       incorporation or organization)

       11935 South I-44 Service Road, Oklahoma City, Oklahoma           73173
       (Address of principal executive offices)                       (Zip Code)

Issuer's telephone number 405/290-7788

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:
Title of each class -- Common Stock, par value $.001

       Check  whether the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No ____

       Check if there is no disclosure of delinquent  filers in response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

       State issuer's revenues for its most recent fiscal year.  $19,550,949




<PAGE>



       State  the   aggregate   market   value  of  the  voting  stock  held  by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days.  (See  definition  of  affiliate in Rule 12b-2 of the Exchange
Act).  $13,192,517  based on 1,954,447  shares at $6.75 per share, the last sale
price of the Common Stock on February 18, 1998.


                         (ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDING DURING THE PAST FIVE YEARS)

     Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes No

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares  outstanding of each of the issuer's  classes of
common  equity,  as of the  latest  practicable  date.  3,526,311  shares  as of
February 18, 1998

                       DOCUMENTS INCORPORATED BY REFERENCE

       If  the  following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the Form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The listed documents  should be clearly  described for  identification  purposes
(e.g.,  annual  report to security  holders for fiscal year ended  December  24,
1990).  Items 9 through 12 of Part III of this Form 10-KSB are  incorporated  by
reference from the Issuer's  definitive proxy statement to be filed on or before
March 31, 1997.

Transitional Small Business Disclosure Format (check one). Yes        No  X 
                                                              ______     _____  








                                                        -2-


<PAGE>


                                TABLE OF CONTENTS

                                     Part I

                                                                           PAGE
Item 1.        Business. . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Item 2.        Properties. . . . . . . . . . . . . . . . . . . . . . . . .  10

Item 3.        Legal  Proceedings. . . . . . . . .  . . . . . . . . . . . . 10

Item 4.        Submission of Matters to a Vote of Security  Holders. . . . .10

                                     Part II

Item 5.        Market for Registrant's Common Equity and Related
               Stockholder  Matters. . . . . . . . . . . . . . . . . . . .  11

Item 6.        Management's Discussion and Analysis of Financial
               Condition  and Results of  Operations . . . . . . . . . . .  11

Item 7.        Financial  Statements . . . . . . . . . . . . . . . . . . .  16

Item 8.        Changes in and Disagreements with Accountants on
               Accounting and Financial  Disclosure. . . . . . . . . . . .  17

                                    Part III

Item 9.        Directors and Executive  Officers of the  Registrant. . . .  18

Item 10.       Executive  Compensation . . . . . . . .. . . . . . . . . . . 18

Item 11.       Security Ownership of Certain Beneficial Owners
               and  Management. . . . . . . . . . . . . . . . . . . . . . . 18

Item 12.       Certain  Relationships and Related  Transactions  . . . . .  18

                                     Part IV

Item 13.       Exhibits  and  Reports on Form 8-K  . . . . . . . . . . . .  19

               Financial  Statements . . . . . . . . . . . . . . . . . . .  F-1

               Index to  Exhibits. . . . . . . . . . . . . . . . . . . . .  24







                                                        -3-


<PAGE>


                                     PART I

Item 1.  Description of Business.

       The Company is in the  business  of  manufacturing  and  selling  modular
cooling  towers.  Its TTMT Series  cooling tower is made primarily of fiberglass
reinforced  plastic  and is sold in both  the air  conditioning  and  industrial
segments of the cooling tower market.  The TTCT Series modular  concrete cooling
tower was  introduced  in 1995 for the  industrial  and utility  segments of the
cooling tower market.  The Company's TTMT Series cooling tower utilizes  several
innovative   design  features,   including  the  Rotary  Spray   Nozzle(TM),   a
bottom-mounted  direct drive motor fan assembly and a modular design to create a
compact,   efficient  cooling  tower  which  management  believes  reduces  many
deficiencies  associated with other cooling towers, which do not incorporate all
of  these  design  features.   Individual   modules  can  be  utilized  for  air
conditioning and light industrial applications,  and the modular design allows a
number of modules to be connected in a series for large  industrial  and utility
applications.  Compact  design  of  the  modules  permits  them  to  be  factory
assembled,  inventoried for immediate  shipment,  easily transported and quickly
installed.  The  design  of  the  TTMT  Series  cooling  tower  allows  it to be
transported as a complete module on a standard low boy trailer.  The TTCT Series
modular concrete tower features  tilt-up concrete  construction and incorporates
many of the innovative  characteristics  of the TTMT Series  cooling tower.  The
Company  leases TTMT Series modules to customers for temporary or emergency use.
The Company also sells accessory equipment,  water treatment equipment and water
treatment chemicals.  The Company also develops technology for the cooling tower
industry  and  markets  that  technology   either  directly  through   licensing
arrangements or in the form of products as above stated.

The Cooling Tower Market

       The  market for  cooling  towers is divided  into  three  general  market
segments:  the air conditioning or HVAC segment,  the light to medium industrial
segment,  and the heavy  industrial  and utility  segment.  Although all cooling
towers work on the same basic  principles,  cooling towers generally are divided
into two  categories:  (1) factory  assembled units and (2) field erected cells.
Factory assembled cooling towers are shipped to the customer as a completed unit
and typically are sold to HVAC and light to medium industrial users. In the HVAC
segment of the market,  cooling  towers are sized from 30 to 500  nominal  tons.
Light to medium industrial  applications  require cooling towers with capacities
ranging from 500 to 10,000 gallons per minute ("GPM").  GPM is the standard unit
of  measurement in the industrial  segment,  while the HVAC segment  denominates
capacity in nominal  tons.  One ton is  approximately  equivalent  to three GPM.
Because of shipping and other  technical  constraints,  factory  assembled units
ordinarily  range in size from 30 to 1,000 nominal tons.  Field erected  cooling
towers  are  constructed  on site and  typically  are sold to  medium  and heavy
industrial and utility users.  Heavy  industrial  applications  require  cooling
towers sized from 10,000 to 100,000 GPM, while utility  applications  range from
30,000 to 200,000 GPM.

       Cooling  towers  can  range in price  from less  than  $20,000  for a 500
nominal ton unit intended for HVAC use to $1,000,000 or more for a cooling tower
built to meet the  specifications  of a heavy  industrial  or utility  customer.
Accurate  information  about cooling tower industry sales is difficult to obtain
because many cooling  tower  companies  are  privately  held or are divisions of
large  companies.  In addition,  the size of the new cooling tower market can be
understated  because the  refurbishment or rebuilding of a cooling tower in some
cases essentially entails the erection of a new cooling tower even though it may
not be characterized as a new cell. Limited market information is available from
the U.S. Department of Commerce and from private studies. Based


                                                        -4-

on  this  limited  information  and  management's   evaluation  of  the  market,
management  estimates  that the total annual United States  cooling tower market
ranges from $300  million to $380  million and that the total  annual  worldwide
market ranges from $1.5 billion to $2.0 billion.

The TTMT Series Cooling Tower

       Cooling towers come in a variety of sizes,  prices,  designs and quality.
Small capacity  cooling towers  intended for HVAC use typically are forced draft
or induced draft towers which may be  constructed of wood,  galvanized  steel or
fiberglass.  Most large  capacity  cooling  towers used in the United States and
worldwide today are induced draft towers and are constructed  primarily of wood.
These wood towers are usually  constructed  on a concrete water basin and have a
treated  wood  framework,  which is  sometimes  clad  with  galvanized  steel or
fiberglass.  Internal  components of  conventional  cooling towers are typically
made of wood, galvanized steel, stainless steel, fiberglass and plastic.

       The  TTMT  Series  cooling  tower  is  designed  to  address  many of the
deficiencies which management believes exist in the design of most other cooling
towers  on  the  market.   Management  believes  that  the  modular  design  and
interconnectability of the TTMT Series cooling tower is unique in the industrial
segment  of  the  market.   The  TTMT  Series   cooling   tower  is   efficient,
corrosion-free, low maintenance and available for immediate delivery.

       The modular  design of the TTMT Series  cooling  tower allows a number of
units  to  be  interconnected  to  meet  almost  any  cooling   requirements  or
specifications.  Other  vendors offer small factory  assembled  cooling  towers,
including  units  which  incorporate  fiberglass  components  and  which  can be
interconnected.  However, most  factory-assembled  units are forced draft towers
and  interconnection  of some models of such towers  exacerbates  recirculation,
resulting in thermal performance losses which are typical of this type of tower.
Thus, other factory assembled cooling towers have limited  application except in
the HVAC segment and light  industrial  segment of the market.  Most segments of
the cooling  tower  market can be served by the TTMT Series  cooling  tower from
light HVAC applications to large petrochemical and refinery operations.

       Immediate  delivery of the TTMT Series cooling tower is possible  because
the modules are factory assembled and can be inventoried. Usually, there is only
one hour of  installation  time required per module.  The concrete basin of most
field erected  cooling towers is replaced in the TTMT Series cooling tower by an
internal fiberglass water basin. The TTMT Series cooling tower is supported on a
substructure  which can either be customer provided  fabricated metal,  concrete
piers,  or the Company's  own FRP  substructure.  The modular  design also lends
itself to shipping by standard  trucking  without special  permits.  TTMT Series
modules are readily shipped to international customers as well.

       Management  believes that a problem with many cooling towers manufactured
today arises from water  distribution  nozzles which tend to clog.  Most nozzles
used in cooling  towers today utilize an  orifice/splash  plate  combination  to
minimize the clogging  problem.  This design  often  exhibits  void areas in the
water   distribution   which  causes   inefficient   operation  and  performance
deficiencies.  These  deficiencies  can be overcome to some degree by installing
additional  fill media  and/or  designing a higher air inlet area in the cooling
tower. This results in additional capital investment as well as higher operating
costs due to increased pump head and fan horsepower requirements.


                                                        -5-


<PAGE>



       To address  this  problem,  Mr.  Curtis  designed and patented the Rotary
Spray Nozzle(TM)  primarily for use in the TTMT Series cooling tower. The Rotary
Spray  Nozzle(TM)  is designed  to operate  clog-free  even in severe  operating
conditions.  This  nozzle  utilizes a  rotating  disc that  operates  on a water
bearing to evenly  distribute  the flow  throughout  the entire  fill area while
providing a self-cleaning  action. The radial discharge design allows the nozzle
to  operate  as low as one inch  above the fill  media and at a lower  operating
pressure than most conventional  nozzles.  Since conventional  nozzles typically
operate at  distances  of up to two feet above the fill media,  the Rotary Spray
Nozzle(TM)  adds  increased  performance  and  significantly  reduces  pump head
requirements.

       In addition to reduced pump head requirements  attributable to the Rotary
Spray Nozzle(TM),  the pump head requirement in the TTMT Series cooling tower is
reduced  because the  circulating  water is collected in an elevated water basin
above the air inlet.  This results in reduced pump operating  costs for the TTMT
Series  cooling tower  compared  with a comparably  sized  conventional  cooling
tower.

       The TTMT Series  cooling  tower was  designed  with a bottom  mounted fan
system.  Maintenance  is greatly  reduced by this  design as the fans are direct
motor driven without gear boxes, drive shafts, and pulleys. Each module has four
fans which can be zoned to operate more efficiently. The mechanical equipment is
located  in the cool,  dry air  stream and is also  protected  from the  natural
elements by the cooling tower itself. Service can be performed from ground level
and customer  spare parts  inventory is limited to one motor and one fan. In the
event of mechanical failure, the probability is that only one fan or motor would
be  inoperable,  enabling the continued  operation of the  remaining  three fans
until repairs could be made.

       The TTMT Series  cooling tower has a water  collection  system  installed
just  below the fill  media and above  the  fans.  The water  collection  system
consists  of a network of chevron  type blades  positioned  in a canopy over the
fans and supported by internal FRP beams.  The water is collected  from the fill
media and  discharged  into  hollow FRP  support  beams which serve as the water
basin.  The fill  media is nestled  on top of the water  collector  vanes and is
easily installed or removed. The distribution system, consisting of a PVC header
pipe and laterals, is connected to the top of the module by molded end caps. The
drift (or mist) eliminators are supported by the distribution  piping header and
laterals and locked into the molded perimeter wall channel.

       The  FRP   construction  of  the  TTMT  Series  cooling  tower  virtually
eliminates all significant  corrosion problems.  The wood structural  components
used in many cooling  towers are usually  treated with chemicals and thus may be
environmentally  undesirable.  Galvanized metal parts also contain zinc and lead
which may cause environmental problems.  Corrosion and deterioration of the wood
and metal parts of a cooling tower may lead to costly  maintenance,  repair, and
ultimate replacement.

       The TTMT Series  cooling  tower is produced in several  sizes.  The basic
units  range in size from a six by six foot  module  to a twelve  foot by thirty
foot module.  The  individual  module  capacities  range from 50 nominal tons to
1,000  nominal  tons,  or  approximately  150 GPM to 3,000  GPM.  This  range is
achieved by using  various sizes of modules and internal  components,  including
motors,  fans and  fill  media.  Individual  modules  of  varying  sizes  can be
connected in a series to satisfy the specific cooling requirements of customers.



                                                        -6-


<PAGE>



The Modular Concrete Cooling Tower

       In December 1994, the Company introduced its TTCT Series concrete cooling
tower for the industrial and utility  segments of the cooling tower market.  The
design of the concrete tower  incorporates some of the patented  technology used
in the Company's TTMT Series cooling tower, as well as technology  unique to the
product.  This tower gives the Company added capabilities to penetrate the large
utility,  petro-chemical and industrial markets. The same technological advances
made with the TTMT Series cooling towers are utilized in the concrete tower. The
concrete tower is built using a tilt-up  construction method which substantially
reduces   construction   time  as  compared  with  a  similarly  sized  wood  or
conventional concrete tower.

Modular Cooling Tower Leasing Program

       The Company also leases modular  cooling  towers.  Because of the compact
size and other design  features of the TTMT Series cooling tower,  it can easily
be mounted on a skid and  equipped  with  necessary  electrical  connections  to
produce a mobile  cooling tower which can be transported by truck to the desired
location.  Leased towers are used to augment  large  cooling  towers during peak
heat loads, to provide temporary cooling while maintenance and repairs are being
made to existing cooling towers,  to supply cooling in the event of a failure of
an  existing   cooling  tower  due  to  fire,   weather   damage  or  mechanical
malfunctions,  and to provide temporary cooling during research and development,
testing and evaluation programs.  The Company has more than seventy-five cooling
towers in its rental fleet.

Patents

     The Company owns patents  (U.S.  Patent No.  5,227,095)  covering the basic
design of the TTMT Series  cooling  tower and the TTCT Series  concrete  cooling
tower  (U.S.  Patent  No.  5,545,356).  The  patents  expire  in 2010 and  2014,
respectively.  The  Company  owns and has applied  for other  United  States and
foreign  patents for technology  used in the TTMT Series and TTCT Series cooling
towers.  Mr. Curtis has also granted an exclusive,  royalty-free  license to the
Company for the Rotary Spray  Nozzle(TM)  which gives the Company the  exclusive
right to use  this  technology  in  cooling  tower  applications.  The  licensed
technology is the subject of patents (U.S. Patent Nos.  5,143,657 and 5,152,458)
which  expire in 2009.  Mr.  Curtis has  retained all rights with respect to the
patents in all applications other than cooling towers.

Product Design and Development

       The Company  spent  $667,222,  $386,474,  and  $108,183  on research  and
development during fiscal years 1997, 1996 and 1995,  respectively.  The Company
is continuously  evaluating its products and manufacturing  methods. The Company
has not developed any  significant  products other than the TTMT Series and TTCT
Series cooling towers, and related  technology,  at this time. The Company plans
to continue to research  refinements  in cooling tower design and  construction,
although it has no fixed research and development budget.







                                                        -7-


<PAGE>



Assembly of Products

       The Company's products are currently assembled at its plant in Chickasha,
Oklahoma.  However,  with completion of its new manufacturing and assembly plant
in South Oklahoma City, (see Item 2.  Description of Property),  the assembly of
the TTMT Series  cooling  towers  will be done at the  Oklahoma  City Plant.  In
addition to assembly,  the Company is bringing  "in-house" the  manufacturing of
substantially all component parts which have been manufactured  (outsourced) for
the Company  using  pultrusion  or  extrusion  molding  technology.  The Company
believes that bringing these manufacturing processes "in-house" will help ensure
and  control  quality  and  supply,  as well as  substantially  reduce  costs of
production of these parts. The Company also casts some of the concrete component
parts  of its  TTCT  Series  cooling  towers.  This  operation  will  remain  in
Chickasha.

Suppliers and Vendors

       The  Company  relies  upon  suppliers  for  materials  and parts  used to
manufacture and assemble its products.  The Rotary Spray Nozzle(TM) is purchased
from a vendor who uses the Company's  tools and dies.  Most  materials and parts
purchased from suppliers are available  from multiple  sources.  The Company has
invested  in tools and dies  which in some  cases are used by  suppliers  in the
manufacture of components for the Company.  However, as noted above, the Company
is moving  substantially all of these manufacturing  processes  "in-house".  The
Company  has not  experienced  any  significant  delays in  obtaining  parts and
components  for  its  products,  and  management  believes  that  the  Company's
relationships with its suppliers are good.

Marketing and Sales

       The Company sells its products  through a combination  of direct sales by
Company  employees,  sales through an  established  nationwide  network of sales
representatives, and sales through representatives,  licensees, distributors and
other  arrangements  in  international  markets.  The Company has opened  direct
offices or entered into international  ventures and/or licensing  agreements for
the  manufacture,  marketing  and/or sales of the  Company's  products in India,
Southeast  Asia,  South  America,  South  Africa,  Mexico and the  Mediterranean
region.  Negotiations are in process for similar  arrangements for China, Korea,
Taiwan, Japan, and Europe. Sales representatives  typically market the Company's
products along with a variety of other cooling tower related products.

       In  addition to its direct  sales  activities,  the  Company  markets its
products  in a number of other ways,  including  participating  in trade  shows,
conducting   direct  mail   solicitation   and   advertising  in  various  trade
publications.  The Company makes extensive use of marketing videos which portray
its  products  using  pictures  and  computer  animation.  These video tapes are
distributed to engineering  firms,  contractors,  manufacturers  and specialized
mailing lists in the  industrial  cooling  tower market.  The Company also has a
full-time  marketing  manager who is responsible  for  publicizing  the product,
identifying marketing opportunities and developing a marketing strategy.






                                                        -8-


<PAGE>



Warranties and Customer Service

       The Company provides a limited warranty on its products.  During the time
the Company was  redesigning  and refining the TTMT Series  cooling  tower,  the
Company incurred costs associated with correcting problems with and retrofitting
towers  which had been  shipped to  customers.  In 1997,  the  Company  incurred
$426,699 of expenses to  retrofit  and service  towers,  as compared to $358,016
during  fiscal 1996.  The Company also  provides  field  support  services on an
individual  call  basis and  offers  service  maintenance  contracts.  Necessary
repairs are made at the installation site.

Governmental Regulation

       The Company is subject to the requirements of a number of federal,  state
and local laws, such as the federal Occupational Safety and Health Act ("OSHA").
The  Company   generates  small  quantities  of  waste  in  the  course  of  its
manufacturing activities,  some of which are classified as hazardous waste under
state and  federal  law.  The  Company  endeavors  to comply  with all state and
federal laws and believes that it is in compliance with all applicable  federal,
state and local regulations , including environmental regulations.

Competition

       The market for cooling towers is extremely  competitive.  There are 15 to
25  manufacturers  of  cooling  towers in the  United  States.  The two  biggest
manufacturers,  Marley  Cooling Tower Co. and  Baltimore Air Coil,  collectively
account  for  60 to 70  percent  of  the  market.  A  number  of  the  Company's
competitors  are  substantially  larger in size and have greater  financial  and
other  resources  than the  Company.  Many of  these  competitors  have  been in
business for a number of years and are well  established  in the  industry.  The
Company  estimates  that its share of the United States cooling tower market for
1997 is approximately 5%.

       A number of the  Company's  competitors  manufacture  and market  cooling
towers which use fiberglass and other composite materials, PVC cellular fill and
other  construction and design  refinements which are similar to the TTMT Series
cooling tower.  Several  competitors  manufacture  factory assembled  fiberglass
cooling towers,  including units which can be connected in a series.  Management
believes  that its TTMT Series  cooling  tower  offers  advantages  over cooling
towers  produced by the Company's  competitors.  There can be no assurance  that
competitors  will develop and produce a product  which is comparable or superior
to the Company's products.

Employees

       As of November  30,  1997,  the Company  had 135  employees.  None of the
Company's employees is subject to a collective bargaining agreement. The Company
believes that relations with its employees are good.







                                                        -9-


<PAGE>



Item 2.    Description of Property.

       The  Company's  principal  place of  business  is located  in  Chickasha,
Oklahoma.   These  facilities  include  approximately  20  acres  of  land  near
Chickasha,  Oklahoma  with three  separate  production  buildings  totaling over
52,000  square  feet,  a building  of  approximately  8,000  square feet used as
offices  and  a  test  facility,  and  two  one-story  office  buildings  having
approximately  6,500 square feet.  The Company has  purchased a 50-acre tract in
South  Oklahoma  City  and  has  constructed  a new  manufacturing  facility  of
approximately  98,000  square  feet,  which  will  house its  manufacturing  and
assembly  operations.  The Company  began to occupy the facility in January 1998
and expects to commence  full  production  operations in late April or May 1998.
The Company will locate its general offices in this facility temporarily until a
new administration facility is built. The administration facility, approximately
25,000  square  feet,  will also be  constructed  on the site.  Construction  is
expected to begin in April 1998 and be completed in December  1998.  The Company
will move its general  headquarters to this new administration  facility when it
is completed.  The Oklahoma Industries  Authority ("OIA") has partially financed
the new plant facility through an industrial revenue bond issuance in the amount
of $4,405,000.  Management  estimates the Company's total  investment in the new
manufacturing  facility will be $9 million,  including $3.5 million to equip the
facility.  For additional  information  about the financing of the Oklahoma City
facility,  see "MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS-Liquidity and Capital Resources".


       The new Oklahoma  City (OKC) plant is expected to increase  efficiency of
the  Company's   production  and  assembly  process.   The  ceiling  height  and
configuration of the Chickasha plant limits  production  methods.  The OKC plant
should be adequate to support  annual  fiberglass  tower sales of  approximately
$150  million,  which  should be adequate  for several  years.  The OKC plant is
closer to major  transportation  routes and  facilities,  particularly  the Will
Rogers World  Airport.  Management  plans to use the Chickasha  facility for the
Company's  concrete tower and leased tower  operations.  Currently,  much of the
concrete operations are conducted outdoors.

Item 3.  Legal Proceedings

       The Company is a party to legal  proceedings  incidental to its business,
none of which is considered to be material.


Item 4.  Submission of Matters to a Vote of Security Holders.

       No matters were  submitted to  stockholders  during the fourth quarter of
the fiscal year covered by this report.










                                                       -10-


<PAGE>



                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

       The Company's Common Stock is traded  over-the-counter  and quoted on the
NASDAQ system under the symbol  "TTMT".  The following  table shows the high and
low  closing  bid  prices for the Common  Stock as  reported  by NASDAQ for each
quarter during the last three fiscal years.  Bid prices represent prices between
dealers, do not include retail mark-ups,  markdowns or commissions,  and may not
represent actual transactions.
<TABLE>

       <S>                              <C>            <C>
       Quarter Ended                    High           Low

       February 28, 1995                5 1/4         3 1/2
       May 31, 1995                     5 1/4         3 3/4
       August 31, 1995                  4             2 1/2
       November 30, 1995                4 3/4         2 1/2
       February 28, 1996                7 5/8         4
       May 31, 1996                     10 1/4        6 7/8
       August 31, 1996                  12 1/2        8 3/8
       November 30, 1996                15            9 1/8
       February 28, 1997                11 1/4        10
       May 31, 1997                     9 5/8         8
       August 31, 1997                  9 3/8         7 3/8
       November 30, 1997                8 5/8         7
</TABLE>

       On February 18, 1998, the last sale price of the Common Stock as reported
by NASDAQ was $6 3/4 per share.  On February 18, 1998, the Common Stock was held
of record by 56  holders.  The  Company  believes  that  there are more than 400
beneficial holders of its Common Stock.

       The  Company  has not paid  dividends  on its  Common  Stock and does not
anticipate  paying dividends in the foreseeable  future.  The Company intends to
retain future earnings, if any, for use in its business.

Item 6.  Management's Discussion and Analysis or Plan of Operation.

General

       The Company has been in the  conventional  cooling tower  business  since
1985, which consists of  constructing,  repairing and upgrading forced draft and
induced  draft wood  cooling  towers and selling  spare  parts for  conventional
cooling  towers.  In 1991, the Company began  developing its TTMT Series cooling
tower,  and the Company  shifted its emphasis  from  conventional  cooling tower
projects to developing the TTMT Series cooling tower.  The Company began selling
prototypes  of its modular  cooling  tower in 1991 and continued to sell modules
during the  development  stage of the  product.  Development  of the TTMT Series
cooling tower was  completed  during 1994.  The Company also  developed the TTCT
Series  concrete  cooling tower during 1994.  This product was introduced to the
market during the first quarter of 1995. The Company also sells parts, accessory
equipment,  water treatment  equipment,  water treatment  chemicals,  and leases
cooling towers.  Additionally,  the Company develops  technology for the cooling
tower industry and markets that  technology  either directly  through  licensing
agreements or in the form of its products.
                                                       -11-


<PAGE>


       The Company derives revenue from the following  principal  sources:  TTMT
Series  cooling tower sales;  TTCT Series cooling tower  construction  projects;
modular cooling tower leases;  other tower revenue consisting of parts sales and
service,  accessory  equipment,  water  treatment  equipment and water treatment
chemicals;  and other operating revenue  consisting of fees for the licensing of
its technology to others, primarily internationally.  TTMT Series cooling towers
are  typically  sold on a bid basis and  revenue is  generally  recognized  when
towers are shipped to customers. TTCT Series concrete cooling tower projects are
typically  sold on a  fixed-price  basis.  Revenue  and  related  costs for such
projects are recognized under the percentage of completion method of accounting.
Rental towers are usually leased under short-term or  month-to-month  agreements
and revenue is recognized  when earned.  Revenues from licensing  agreements are
recognized  when  a  non-cancelable   contract  is  signed  specifying  a  fixed
non-refundable  licensing  fee and  technology  materials  are  delivered to the
licensee and governmental approval has been obtained when required.

Results of Operations

     Twelve  Months  Ended  November  30, 1997  Compared to Twelve  Months Ended
     November 30, 1996

       For the twelve  months  ended  November 30,  1997,  total tower  revenues
increased to $18,690,454 from $17,796,544 for the comparable period in the prior
year. During the current twelve month period, 65 percent of total tower revenues
was derived from sales of 317 modular  fiberglass  cooling towers, 19 percent of
total tower revenues was derived from design and construction of the TTCT Series
concrete  cooling  towers,  7 percent of total tower  revenues  was derived from
rental of  modular  fiberglass  cooling  towers,  and 9 percent  of total  tower
revenues was derived from other tower revenue.  In the  comparable  twelve month
period in 1996, 60 percent of total tower revenues was derived from sales of 288
modular  cooling  towers,  30 percent of total tower  revenues  was derived from
design and  construction of modular  concrete  towers,  4 percent of total tower
revenues was derived  from rental of modular  cooling  towers,  and 6 percent of
total tower revenues were derived from other tower revenue. Other tower revenues
consist primarily of modular tower parts sales and service, accessory equipment,
water treatment equipment and water treatment  chemicals.  The increase in tower
sales revenues for 1997 is due not only to the increase in the quantity of units
sold but  also to the  sales of  larger  capacity,  more  expensive  units.  The
decrease in  concrete  tower  revenues is due to the  decrease in the number and
size of jobs  completed  and in process.  The increase in other tower revenue is
due  mainly  to the sale of  proprietary  parts to  licensees.  Other  operating
revenue for the twelve  months ended  November 30, 1997,  consists of fees which
were  realized as a result of  international  license  agreements  covering  the
Republic  of  Mexico  and  the  Mediterranean   region.   These  licensing  fees
demonstrate the Company's ability to capitalize on the technology it develops.

       The Company's cost of goods sold and constructed  during the twelve-month
period  ended  November 30, 1997 was  $13,842,816,  or 74 percent of total tower
revenues, as compared to $14,740,210 or 83 percent, during the comparable period
in 1996.  Increased  overall  margin for the  current  year is due mainly to the
increase in rental and other tower revenues which are higher margin  operations,
and an  improvement  in gross  margin  in the  fiberglass  line as that  product
continues  to  mature.  In the  concrete  line,  gross  margins  are  less  than
anticipated  because  of the  recent  introduction  of the  product.  Management
believes  that gross  margins on concrete  projects will improve as this product
line  continues  to  mature.  Included  in the cost of goods sold for the twelve
month period ended November 30, 1997, is $426,699 to retrofit and service towers
previously sold. This compares to retrofit and warranty costs of $358,016 during
the fiscal year ended November 30, 1996. In 1995, design changes were made and a
complete quality control system was implemented  which management  believes will
continue to control such per unit expenditures in future periods.
                                                       -12-

       The twelve-month  period ended November 30, 1997 reflected an increase in
general and  administrative  expenses  from  $1,543,530 in 1996 to $1,703,896 in
1997.  This increase was due mainly to an increase in the allowance for doubtful
accounts of $150,000.  Selling expenses  increased from $1,009,499 to $1,309,292
due to increased  sales and marketing  efforts for both the  fiberglass  and the
concrete  modular cooling  towers,  including an increase in sales staff related
primarily  to the  opening of direct  international  sales  offices.  Management
expects the increased  investment in selling  expenses to have a positive impact
on revenues in future periods.  Research and development expenses increased from
$386,474  in 1996 to  $667,222  in 1997 as the  Company  continued  to  research
refinements  in cooling  tower  design  and  construction,  and to  develop  new
products and technology  related to the cooling tower industry.  The Company has
no fixed research and development budget.

       Interest  expense  increased  from  $465,776 for the twelve  months ended
November 30,  1996,  to $646,947 in 1997.  In addition to the  interest  expense
reported,  the  Company  capitalized  $27,937  and  $380,304  in 1996 and  1997,
respectively,  related to the  construction of the new  manufacturing  facility.
Interest  expense  will  increase  significantly  in 1998 as a result of the new
facility financings.

       The Company  recognized  an income tax benefit of $615,919 for the twelve
months ended November 30, 1997, compared to no income tax benefit or expense for
the  comparable  period in 1996.  FAS 109  requires  that the  Company  record a
valuation  allowance when it is more likely than not that some portion or all of
the deferred tax assets will not be realized.  The ultimate  realization  of the
deferred  income  tax  assets  depends  on the  Company's  ability  to  generate
sufficient  taxable income in the future.  In the fourth quarter of fiscal 1997,
management  determined that, based on the Company's  ability to generate taxable
income in two consecutive years (1996 and 1997), it is more likely than not that
the Company  will  realize the deferred  tax assets.  Therefore,  the  valuation
allowance  previously  established  against  the  net  deferred  tax  asset  was
reversed.

       The Company's income from operations for the twelve months ended November
30, 1997 was  $2,027,723  as compared to income from  operations of $956,814 for
the comparable  period in the prior year. The increase in income from operations
reflects the Company's success in developing and marketing of its technology and
products  both  nationally  and  internationally.  The  Company's net income was
$2,062,951  in 1997  compared  to net income of $565,118  for the twelve  months
ended November 30, 1996. The delays in completion and occupancy of the OKC plant
combined with the delays in delivery of the manufacturing  equipment and tooling
will have a negative impact on expected results of operations for the first half
of 1998.

       Currently,   the  Company's  estimated  backlog  is  over  $12.4  million
including  nine contracts for TTCT Series  concrete  cooling towers and/or parts
totaling  $5.8  million.  Seven  concrete  tower  contracts  are  scheduled  for
completion or delivery in the second quarter of 1998 and the remaining contracts
are  projected to be completed  in the third  quarter of 1998.  Interest in this
product has  continued to increase in both the United  States and  international
markets.  Seventy  percent of the  backlog for the  modular  fiberglass  cooling
towers is scheduled for delivery in the first half of fiscal year 1998.





                                                       -13-


<PAGE>



Liquidity and Capital Resources

       At November 30, 1997,  the Company had working  capital of  $6,904,910 as
compared to working  capital of $3,147,126 at November 30, 1996.  Improvement in
the Company's liquidity during the year resulted from profitable  operations and
financing  activities  including cash received from the exercise of common stock
warrants  and  options.  The  Company's  cash  flow  provided  by (used  in) its
operating,  investing and financing activities during fiscal years 1997 and 1996
are as follows:
<TABLE>
       
                                  1997                               1996
<CAPTION>                         ----                               ----
<S>                             <C>                                <C>

Operating activities            ($571,023)                        ($3,423,804)
Investing activities            ($3,695,164)                      ($5,593,098)
Financing activities             $3,967,809                        $9,228,974
</TABLE>

       The Company's capital requirements for its continuing  operations consist
of its general working capital needs, scheduled payments on its debt obligations
and capital  expenditures.  Management  anticipates that the Company's operating
activities  will  require  cash  during  1998,  which  primarily  relates to the
anticipated  growth in  receivables  and inventory  levels to support  expanding
sales. The Company tries to minimize its inventory of component parts,  although
minimum  order  requirements  of some  suppliers can cause  inventory  levels to
fluctuate  significantly  from  period to  period.  Bringing  the  manufacturing
processes in-house will enable the Company to better manage inventory levels and
reduce costs when the new manufacturing facility is fully operational.  However,
fluctuations  in inventory  levels are still expected due to the size of planned
production  runs of  components.  Management  also  attempts to manage  accounts
receivable to increase cash flow, but it is anticipated that accounts receivable
will increase as sales increase.  Other significant variances in working capital
items can also be expected.  Also, the Company's concrete  construction projects
will have a greater effect on working  capital  requirements  in the future.  At
November  30,  1997,  net costs in excess of billing and  estimated  earnings on
uncompleted  contracts  were  $719,447  as  compared  to net  costs in excess of
billings and estimated earnings on uncompleted contracts of $471,716 at November
30, 1996. Normally, concrete construction projects provide for progress payments
of the  contract  price  with a  retainage  of 10 to 15  percent  payable  after
completion of the project.

       Scheduled principal payments on capital leases will total $129,079 during
fiscal 1998. In addition,  $439,308 of principal payments will become due on the
Company's debt during 1998.

       Substantially  all of the Company's planned capital  expenditures  during
1998 will be related to the  completion  of the new  manufacturing  facility and
construction  of the new office  facility  in south  Oklahoma  City.  Management
estimates the Company's total investment in the new manufacturing  facility will
be $9 million,  including $3.5 million to equip the facility. As of November 30,
1997,  the  Company  had  incurred  approximately  $5.6  million  related to the
manufacturing  facility. The Company expects to begin full production operations
in late April or May 1998.  Construction  of the new office facility is expected
to commence in April 1998 and be completed in December 1998.  The  manufacturing
facility  includes  equipment to allow the Company to produce  parts used in the
TTMT Series  cooling  towers which have been  purchased  from  outside  vendors.
Management  believes that product costs can be reduced by producing  these parts
in-house.  However,  the  Company  may incur  unforeseen  costs  and  production
problems, particularly in the short term, in bringing these processes in-house.

                                                       -14-


<PAGE>


       The new  manufacturing  facility has been partially  financed with a $4.4
million loan from the Oklahoma Industries Authority (the "OIA") and a portion of
the proceeds of a private placement of $6 million, 10% Convertible  Subordinated
Debentures (the  "Debentures").  The industrial revenue bonds were issued by the
OIA in  October  1996.  The bonds  are  payable  in  quarterly  installments  of
principal and interest in the amount of approximately  $157,000.  A debt service
reserve  fund of  $157,000  was also set aside from the bond  proceeds.  The OIA
holds a mortgage on the facility to collateralize the bond indebtedness.

       The  Debentures  were issued by the Company  during the third  quarter of
1997,  yielding net proceeds of  approximately  $5,467,000.  The Debentures bear
interest at 10 percent,  which is payable  semiannually,  and mature on June 10,
2000.  The principal  balance of each  Debenture is  convertible  into shares of
common  stock at a price of $8.75  per  share at the  option  of each  Debenture
holder or at the option of the Company if the closing  price of the common stock
is at least 175% of the conversion  price for 20 of 30 consecutive  trading days
and certain other conditions are satisfied.

       In September  1997,  the Company  entered into a loan  agreement with the
City of  Oklahoma  City  under  which a HUD  Section  108 loan in the  amount of
$1,250,000   is  available   to  the  Company  for  start-up   expenses  of  the
manufacturing  facility  and  associated  working  capital  requirements.  As of
November  30,  1997,  none of these  funds  had been  advanced  to the  Company.
Initially  the loan bears  interest  at 20 basis  points  above the LIBOR  rate,
adjusted  monthly,  and interest  only is payable  quarterly.  When HUD provides
permanent financing,  the interest rate becomes fixed at the rate charged by HUD
to the City  and  principal  and  interest  are  payable  quarterly  based on an
eight-year  amortization period. The loan is collateralized by a second mortgage
on the manufacturing facility.

       The  Company has a verbal  commitment  from a lending  institution  for a
total funding of $1,750,000 for equipment and tooling for the new  manufacturing
facility.  In November  1997,  the Company  executed a note  payable for initial
funding of $731,890 and in December  1997,  the Company  executed an  additional
note  payable  for the second  funding in the amount of  $442,974.  The  Company
expects the final funding of $575,136 to occur by March 31, 1998.

       Effective  December 31, 1997, the Company  entered into a $3,500,000 line
of  credit   agreement  with  a  financial   institution   for  working  capital
requirements and completion of the Company's  manufacturing facility in Oklahoma
City.  This  financing  replaced  a  $2,000,000  line of  credit  payable  to an
individual  which had an  outstanding  balance of $499,507 at November 30, 1997.
Interest is payable monthly at a variable rate of two basis points over national
prime rate. The loan matures June 30, 1999. The agreement is  collateralized  by
certain accounts receivable,  inventory, rental fleet and patents.  Negotiations
are in process to increase this line of credit to $5,000,000,  although there is
no assurance that this increase will be obtained.

       The  Company  has a line of credit  at  Chickasha  Bank in the  amount of
$400,000 for short-term  cash flow needs,  of which $251,625 was  outstanding at
November 30, 1997. The Company also has a $1,200,000 credit arrangement with one
of its  major  vendors  to fund  materials  purchased  from the  vendor of which
$158,286 was outstanding and included in accounts payable at November 30, 1997.

       The Company is evaluating sources of debt financing for the Oklahoma City
office facility, which is expected to cost approximately $2.1 million. While the
Company  anticipates  that it will be able to obtain such financing,  it has not
received a  commitment  from any lender and there is no  assurance  that it will
obtain financing for the new office facility.

                                                       -15-


<PAGE>


       During 1997, the Company received net proceeds of approximately  $879,000
from the exercise of options and common stock purchase warrants.

       The Company  believes it has  sufficient  capital  resources  to fund its
capital  requirements  for at least the next four  quarters.  Management is very
pleased with the continued  improvement  in the Company's  liquidity and capital
resources  and believes  that the  Company's  improved  financial  position will
facilitate  additional  growth.  Although the Company's  financial  position has
improved,  substantial  growth beyond that expected by management could increase
the Company's capital  requirements and require it to obtain additional  capital
to maintain  its growth.  In  addition,  the  Company's  debt and capital  lease
obligations  increased 34 percent  during  1997.  While  financial  leverage can
increase the Company's return on equity, it also increases the risk presented to
equity owners of the Company.

Year 2000 Compliance

       Many existing computer programs use only two digits to identify a year in
the date field.  These programs were designed and developed without  considering
the  impact  of the  upcoming  change in the  century.  If not  corrected,  much
computer  application  could fail or create  erroneous  result by or at the Year
2000. The Company has not determined  whether its computer programs are affected
by the Year 2000 issue or  whether  the costs of making  its  systems  Year 2000
compliant or the consequences of failing to take necessary  actions would have a
material  impact on the Company's  financial  position or results of operations.
Management is currently evaluating its systems to assess the situation.

Earnings Per Share

       In  February  1997,  the  Financial  Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards  No. 128,  Earning Per Share ("FAS
128").  FAS  128  will  change  the  computation,  presentation  and  disclosure
requirements  for earnings per share.  FAS 128 requires  presentation of "basic"
and  "diluted"  earnings  per  share,  as  defined,  on the  face of the  income
statement for all entities with complex capital structures. FAS 128 is effective
for financial  statements  issued for periods ending after December 15, 1997 and
requires restatement of all prior period earnings per share amounts. The Company
has determined  that FAS 128 will not have a material impact on its earnings per
share when adopted.

Forward Looking Statements

       Statements  of  the  Company's  or  management's   intentions,   beliefs,
anticipations,  expectations and similar  expressions  concerning  future events
contained in this report constitute  "forward looking  statements" as defined in
the Private Securities  Litigation Reform Act of 1995. As with any future event,
there  can  be no  assurance  that  the  events  described  in  forward  looking
statements  made in this report will occur or that the results of future  events
will not vary materially from those described in the forward looking  statements
made in this report.  Important  factors that could cause the  Company's  actual
performance and operating  results to differ materially from the forward looking
statements  include,  but are not  limited to,  changes in the general  level of
economic  activity  in the markets  served by the  Company,  competition  in the
cooling  tower  industry and the  introduction  of new products by  competitors,
delays in refining the Company's manufacturing and construction techniques, cost
overruns on particular  projects,  availability of capital sufficient to support
the Company's  level of activity and the ability of the Company to implement its
business  strategy,   including   efficient   production  of  its  products  and
utilization of the new OKC plant.

                                                       -16-


<PAGE>


Item 7.  Financial Statements.

       The financial  statements required by this item begin at page F-1 of this
report.


Item 8. Changes In and  Disagreements  With  Accountants  on Accounting and
        Financial Disclosure.

         Effective  July 1, 1996,  Price  Waterhouse  LLP sold its Oklahoma City
practice  to  Coopers  &  Lybrand  L.L.P.,  and  as a  result  resigned  as  the
independent  accountants of the Company.  The reports of Price Waterhouse LLP on
the Company's  financial  statements for the last two fiscal years  contained no
adverse  opinion  or  disclaimer  of  opinion  and  were  not  qualified  as  to
uncertainty,  audit scope or accounting principle. In connection with its audits
for the two most recent  fiscal years and through July 1, 1996,  there have been
no  disagreements  with  Price  Waterhouse  LLP  on  any  matter  of  accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure,  which  disagreements  if not resolved to the  satisfaction  of Price
Waterhouse LLP would have caused it to make  reference  thereto in its report on
the financial statements for such years. During the two most recent fiscal years
and through July 1, 1996,  there have been no  reportable  events (as defined in
Regulation S-K Item 304(a)(1)(v)).

         The Company  engaged  Coopers & Lybrand L.L.P.  as its new  independent
accountants  effective as of July 1, 1996. Through July 1, 1996, the Company had
not consulted with Coopers & Lybrand L.L.P. regarding either (1) the application
of  accounting  principles  to a  particular  transaction,  either  completed or
proposed,  or the type of audit  opinion that might be rendered on the Company's
financial statements, and either a written report was provided to the Company or
oral  advice  was  provided  that  Coopers &  Lybrand  L.L.P.  concluded  was an
important  factor  considered  by the  Company in  reaching a decision as to the
accounting,  auditing  or  financial  reporting  issue;  (2) any matter that was
either  the  subject  of a  disagreement,  as  that  term  is  defined  in  Item
304(a)(1)(iv)  of  Regulation  S-K and the related  instructions  to Item 304 of
Regulation  S-K,  or a  reportable  event,  as  that  term  is  defined  in Item
304(a)(1)(v) of Regulation S-K.






















                                                       -17-


<PAGE>



                                    PART III


Items 9 through 12 of Part III of this Form 10-KSB are incorporated by reference
from the Company's proxy statement to be filed on or before March 29, 1998.













































                                                       -18-


<PAGE>



                                     PART IV

Item 1. Exhibits

        The  following  exhibits  have been  filed as part of this  registration
statement:

          Exhibit No.       Desscription

          3.1-1              Amended and Restated  Certificate of Incorporation 
                             of Tower Tech, Inc.

          3.2-1              Amended Bylaws of Tower Tech, Inc.

          3.3-1              Amendment to Bylaws

          4.1-7              Form of 10% Subordinated Convertible Debenture

          4.2                Omitted

          4.3-1              Form of Stock Certificate

          4.4-1              Form of Underwriters' Warrants

          4.5-8              Form of Placement Agent Warrants

          4.10-3             Registration Rights Agreement, dated February 2, 
                             1996, among Tower Tech,  Inc.,  Lancer LP, Michael
                             Taglich, and Robert Taglich.

          10.1-5             Promissory Note between Tower Tech,  Inc., and
                             Campbell, Hurley, Campbell and Campbell, dated
                             August 1, 1996.

          10.2-10            Loan  Agreement  between  Tower Tech,  Inc.,and the
                             City of Oklahoma City, dated September 8, 1997.

          10.3-10            Form  of  Loan Agreement between Tower Tech,  Inc.,
                             and Chickasha Bank & Trust, dated September 22,
                             1997.

          10.4-6             Loan  Agreement   between  Tower  Tech,  Inc., and 
                             Oklahoma Industries Authority dated October 1, 1996





                                                       -19-


<PAGE>





          10.5-7             Form of  Debenture  Purchase  Agreement  among  the
                             Company, Taglich  Brothers, D'Amadeo  Wagner &
                             Company, Incorporated and various lenders.

          10.6-10            Promissory  Note  between  Tower Tech,  Inc.  and
                             Electrical Constructors, dated May 8, 1996

          10.7-10            Promissory Note between Tower Tech, Inc., as Maker,
                             and Electrical Constructors, as Payee, dated May 8,
                             1996

          10.8-1             Promissory  Note between  Tower Tech,  Inc.,  and
                             Electrical Constructors, dated March 25, 1997.


<PAGE>



          10.9-1             Agreement  by and between  Morrison  Molded  Fiber
                             Glass Co., and  Tower  Tech, Inc., made  effective
                             July  26,  1993, regarding  the purchase by  Tower
                             Tech, Inc.  of  certain pultruded components from
                             Morrison Molded Fiber Glass Company

          10.10-1            U. S.Patent No.5,143,657 entitled FLUID DISTRIBUTOR
                             issued September 1, 1992

          10.11-1            U. S. Patent No. 5,152,458 entitled AUTOMATICALLY
                             ADJUSTABLE FLUID DISTRIBUTOR issued October 6, 1992

          10.12-1            U. S. Patent No. 5,227,095 entitled MODULAR COOLING
                             TOWER issued July 13, 1993

          10.13-1            Exclusive  License  Agreement by and between Harold
                             D. Curtis and Tower Tech, Inc.

          10.14-1            Assignment by and between Harold D. Curtis, as
                             Assignor, and Tower Tech, Inc., as Assignee

          10.15-1            Assignment of Invention Contained in PCT 
                             Application by and between Harold D. Curtis, as 
                             Assignor,  and Tower Tech, Inc., as Assignee



<PAGE>


          10.16-1            Assignment  of Patent by and between  Harold D. 
                             Curtis, as Assignor, and Tower Tech, Inc., as 
                             Assignee,  of Patent No. 5,227,095

          10.17-4            1993 Stock Option Plan, as amended



                                                       -20-


<PAGE>



          10.18             Promissory  Note between Tower Tech, Inc. and 
                            Southwestern Bank & Trust Company, dated
                            December 31, 1997

          10.19             Omitted

          10.20             Omitted

          10.21-10          Promissory  Note  between  Tower  Tech,  Inc. and J.
                            David Bronstad, dated May 31, 1996

          10.22             Omitted

          10.23             Omitted

          10.24             Omitted

          10.25             Omitted

          10.26             Omitted

          10.27             Omitted

          10.28             Omitted

          10.29             Omitted

          10.30             Omitted

          10.31-2           Warrant  Certificate,  dated April 25,  1995,
                            between J.  David  Bronstad  and Tower  Tech,
                            Inc., entitling J. David Bronstad to purchase
                            40,000  shares of Tower Tech,  Inc.'s  common
                            stock, $.001 par value

          10.32-2           Warrant  Certificate,  dated April 25,  1995,
                            between James McDonald and Tower Tech,  Inc.,
                            entitling  James McDonald to purchase  10,000
                            shares of Tower Tech,  Inc.'s  common  stock,
                            $.001 par value

          16.1-9            Letter on changes in certifying accountant

          23.1              Consent of Coopers & Lybrand L.L.P.






                                                       -21-


<PAGE>



1      Incorporated by reference from the same numbered  exhibit to Registration
       Statement No. 33-69574-FW,  as filed with the Commission on September 29,
       1993, and as amended.

     2 Incorporated  by reference from the same numbered  exhibit to Form 10-QSB
       for the quarter ended August 31, 1996.

     3 Incorporated by reference from the same numbered exhibit to Form 10-KSB/A
       for the year ended November 30, 1995.

     4 Incorporated by reference from the same numbered  exhibit to Registration
       Statement No. 333-07337 on Form S-8.

     5 Incorporated  by reference from the same numbered  exhibit to Form 10-QSB
       for the quarter ended August 31, 1996.

     6 Incorporated  by reference from the same numbered  exhibit to Form 10-KSB
       for the year ended November 30, 1996.

     7 Incorporated  by reference from the same numbered  exhibit to Form 10-QSB
       for the quarter ended May 31, 1997.

     8 Incorporated by reference from the same numbered  exhibit to Registration
       Statement  No.  333-36501,  Form S-3,  as filed  with the  Commission  on
       September 26, 1997.

     9  Incorporated  by reference  from the same  numbered  exhibit to Form 8-K
        filed on July 2, 1996.

     10 Incorporated by reference from the same numbered  exhibit to Form 10-QSB
        for the quarter ended August 31, 1997.


       (b) The  Company  did not file any reports on Form 8-K during the quarter
           ended November 30, 1997.


















                                                           -22-


<PAGE>


                                   SIGNATURES


       In  accordance  with  Section  13 or  15(d)  of  the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                TOWER TECH, INC.


                                 By:      HAROLD CURTIS
                                          -------------
                                          Harold Curtis, Chief Executive Officer


       In accordance  with the  requirements  of the Securities  Exchange Act of
1934,  this  registration  statement was signed by the following  persons in the
capacities and on the dates stated.

SIGNATURE                   TITLE                                DATE

HAROLD CURTIS               Chief Executive Officer Director   February 27, 1998
-------------
Harold Curtis               (Principal Executive Officer)

CHARLES D. WHITSITT         Chief Financial Officer            February 27, 1998
-------------------
Charles D. Whitsitt         (Principal  Financial  Officer
                            and Principal Accounting Officer)

LINCOLN E. WHITAKER         Director                           February 27, 1998
-------------------
Lincoln E. Whitaker

RANDAL K. OBERLAG           Director                           February 27, 1998
-----------------
Randal K. Oberlag

LEON POAG                   Director                           February 27, 1998
---------
Leon Poag
















                                                       -23-


<PAGE>



                          INDEX TO FINANCIAL STATEMENTS

                                                                        PAGE

Report of Independent Accountants. . . . . . . . . . . . . . . . . . . .  F-2

Balance Sheets as of November 30, 1997 and 1996. . . . . . . . . . . . .  F-3

Statements of Operations for the years ended November 30, 1997
      and November 30, 1996 . . . . . . . . . . . . . . . . . . . . . .   F-4

Statements of Stockholders' Equity for the years ended November 30, 1997
      and  November 30, 1996 . . . . . . . . . . . . . . . . . . . . . .  F-5

Statements of Cash Flows for the years ended November 30, 1997
      and November 30, 1996. . . . . . . . . . . . . . . . . . . . . . .  F-6

Notes to Financial Statments. . . . . . . . . . . . . . . . . . . . . .   F-8
































                                       F-1


<PAGE>



                        Report Of Independent Accountants


To the Board of Directors and Stockholders of
Tower Tech, Inc.


We have  audited  the  accompanying  balance  sheets of Tower  Tech,  Inc.  (the
"Company")  as of November  30,  1997,  and 1996 and the related  statements  of
operations,  stockholders' equity and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of the Company as of November 30,
1997 and 1996,  and the  results  of its  operations  and its cash flows for the
years then ended in conformity with generally accepted accounting principles.




                                                     COOPERS & LYBRAND L.L.P.


Oklahoma City, Oklahoma
February 20, 1998
















                                       F-2


<PAGE>

Tower Tech, Inc.
Balance Sheets
                                                         November 30,
<TABLE>
                                               1997                   1996

<S>                                      ----------------       ----------------
Assets
                                              <C>                <C>
Current assets:                          
    Cash                                       $  551,954         $    850,332
    Accounts receivable, net of allowance 
      of $172,645 and $22,645 respectively      5,740,404            4,702,268
    Accounts receivable, affiliate                327,295              324,430
    Notes receivable, current                     208,624                  -
    Receivables from officers and employees        69,547               48,867
    Costs in excess of billings and 
      estimated earnings on uncompleted 
      contracts                                    719,447              471,716
    Inventory                                    3,027,656            2,919,264
    Restricted assets, current                     160,468              373,532
    Prepaid expenses                               129,273               28,454
    Deferred tax asset                              67,147                  -
                                                -----------          ----------
      Total current assets                      11,001,815            9,718,863

Property, plant and equipment, net               9,604,258            3,774,209
Rental fleet, net                                2,023,738              837,491
Restricted assets, non-current                         -              3,572,616
Patents, net                                       213,092              158,759
Notes receivable, non-current, net of 
  unamortized discount of $59,505                  719,371                  -
Deferred tax asset                                 577,873                  -
Other assets                                       716,258              248,398
                                                -----------          ----------

          Total assets                          $24,856,405         $18,310,336
                                                ===========         ===========

Liabilities and Stockholders' Equity
Current liabilities:
    Current maturities of long-term debt        $   439,308         $ 2,919,113
    Current portion of obligations under
      capital lease                                 129,079             111,934
    Accounts payable                              2,261,228           2,554,742
    Accounts payable, affiliate                      10,577                 -
    Book overdraft                                  193,999                 -
    Accrued liabilities                             601,039             802,469
    Interest payable                                318,540              54,365
    Customer deposits                               114,034             129,114
    Income tax payable                               29,101                 -
                                                 -----------          ---------

Total current liabilities                         4,096,905           6,571,737
                                                 -----------          ---------

Long-term debt, net of current maturities         13,688,803          7,522,100
                                                  -----------         ---------

Obligations under capital lease, net of
  current maturities                                 171,907            259,271
                                                  -----------         ---------

Commitments and Contingencies (Notes 6,9,and 15)

Stockholders' equity:
Preferred stock, $.001 par value; 2,000,000
   shares authorized; no shares issued and 
   outstanding at November 30, 1997 and 1996             -                 -
Common stock,  $.001 par value; 10,000,000
   shares authorized; 3,526,311 and 
   3,370,368 shares issuedand outstanding
   at November 30, 1997 and 1996,
   respectively                                        3,527              3,371
Capital in excess of par                           8,066,403          7,187,948
Accumulated deficit                               (1,171,140)        (3,234,091)
                                                 ------------        ----------

     Total stockholders' equity                    6,898,790          3,957,228
                                                 ------------        ---------- 

     Total liabilities and stockholders'
       equity                                    $24,856,405        $18,310,336

                                                 ===========        ===========
</TABLE>
      The accompanying notes are an integral part of these financial statements

                                       F-3
<PAGE>
Tower Tech, Inc.
Statements of Operations
                                                    Year Ended
                                                    November 30,
                                       1997                             1996
<TABLE>
<S>
                                 ----------------                ---------------
                                <C>                              <C>
Revenues:
    Tower sales                     $12,127,978                     $10,628,983
    Concrete tower construction       3,596,569                       5,355,931
    Tower rentals                     1,214,403                         670,055
    Other tower revenue               1,751,504                       1,141,575
                                   ------------                    ------------

           Total tower revenue       18,690,454                      17,796,544

    Other operating revenue             860,495                         839,983
                                    -----------                     -----------

           Total revenues            19,550,949                      18,636,527
                                    -----------                     -----------

Costs and expenses:
    Cost of goods sold and 
      constructed                    13,842,816                      14,740,210
    General and administrative        1,703,896                       1,543,530
    Selling expenses                  1,309,292                       1,009,499
    Research and development            667,222                         386,474
                                    -----------                     -----------

       Total costs and expenses      17,523,226                      17,679,713
                                    -----------                     -----------

       Income from operations         2,027,723                         956,814
                                    -----------                     -----------

Other income (expense):
    Interest, net                      (646,947)                       (465,776)
    Miscellaneous                        66,256                          76,477
    Loss on sale of assets                  -                            (2,397)
                                    ------------                    -----------

       Total other income (expense)    (580,691)                       (391,696)
                                    ------------                    -----------

Income before income taxes            1,447,032                         565,118

Income tax benefit                      615,919                            -
                                   ------------                     -----------

Net income                            2,062,951                         565,118

Dividends on preferred shares               -                           (62,812)
                                   ------------                    ------------

Net income applicable to common
  shares                            $ 2,062,951                     $   502,306
                                    ===========                     ===========

Weighted average shares 
  outstanding -  primary              3,538,113                       3,281,291
                                    ===========                     ===========

Income per common share -
   primary                         $       0.58                    $       0.15
                                   =============                   ============

Weighted average shares
  outstanding - fully diluted         3,538,113                       3,368,057
                                    ===========                     ===========

Net income per common share -
  fully diluted                     $       0.58                   $       0.15
                                    ============                   ============

</TABLE>
 The  accompanying notes are an integral part of these financial statements.

                                      F-4


<PAGE>
Tower Tech, Inc.
Statements of Stockholders' Equity
                                                       Year Ended
                                                       November 30,
<TABLE>
                                               1997                   1996
<S>                                      ------------------     ----------------

Preferred stock                         <C>                      <C>
Balance at beginning of period          $    -                   $       316
    Conversion of preferred stock -
      Series B to common stock               -                           (35)
    Conversion of preferred stock -
      Series C to Series E                   -                           (131)
    Conversion of preferred stock -
      Series C to Series E                   -                            131
    Purchase of preferred stock - 
     Series E                                -                           (131)
    Redemption of preferred stock -
     Series D                                -                           (150)
                                        -------------              ------------

Balance at end of period                     -                            -
                                        -------------              ------------

Common stock
Balance at beginning of period                  3,371                     2,429
    Issuances of common stock                     -                         781
    Conversion of preferred stock -
      Series B to common stock                    -                          70
    Exercise of warrants and options              156                        91
                                        --------------             ------------

Balance at end of period                        3,527                     3,371
                                        --------------             ------------

Capital in excess of par
Balance at beginning of period              7,187,948                 4,756,109
    Proceeds from issuance of 
      common stock                                -                   3,404,350
    Preferred dividends                           -                     (62,812)
    Redemption of preferred stock -
      Series D                                    -                  (1,499,850)
    Conversion of preferred stock -
      Series B to common stock                    -                         (35)
    Purchase of preferred stock -
      Series E                                    -                     (18,941)
    Exercise of warrants and options          878,455                   609,127
                                          ------------              -----------

Balance at end of period                    8,066,403                 7,187,948
                                          ------------               ----------

Accumulated deficit
Balance at beginning of period             (3,234,091)               (3,799,209)
    Net  income                             2,062,951                   565,118
                                          ------------               ----------

Balance at end of period                   (1,171,140)               (3,234,091)
                                            -----------             -----------

Total stockholders' equity                $ 6,898,790               $ 3,957,228
                                          ===========               ===========

</TABLE>
  The  accompanying  notes are an integral part of these financial statements.



                                      F-5


<PAGE>
Tower Tech, Inc.
Statements of Cash Flows

                                                         Year Ended
                                                         November 30,
                                                 1997                    1996
<TABLE>
 <S>
                                             -------------         -------------
Cash flows from operating activities:       <C>                     <C>
   Net income                               $ 2,062,951             $   565,118
   Adjustments to reconcile net income
      to net cash used in operating
      activities:
   Depreciation and amortization                677,839                 419,085
      Bad debt expense                          150,000                     -
      Deferred tax benefit                     (645,020)                    -
      Loss on disposal of equipment                 -                     2,397
      Increase in notes receivable              (840,495)                   -
      Payment on note receivable                  37,500                    -
      Increase in accounts receivable        (1,313,136)             (2,929,140)
      Increase in accounts receivable
        affiliate                                (2,865)                    -
      (Increase) decrease in receivables
        from officers & employees               (20,680)                 13,472
      Increase in inventory                    (108,392)               (816,179)
      (Increase) decrease in prepaid
        expenses                               (100,819)                 59,905
      Increase in other assets                  (14,003)                (60,356)
      Decrease in accounts payable             (293,514)                 (4,898)
      Increase in accounts payable, 
        affiliate                                10,577                     -
      Increase in accrued liabilities            62,744                 209,169
      (Decrease) increase in customer
        deposits                                (15,080)                129,114
      Increase in income tax payable             29,101                    -
      Increase in costs in excess of
        billings                               (247,731)             (1,011,491)
                                              -----------            -----------

Net cash used in operating activities          (571,023)             (3,423,804)
                                               ----------            -----------

Cash flows from investing activities:
   Purchases of property and equipment       (6,041,602)             (1,133,015)
   Decrease in restricted assets              3,785,680                     -
   Additions to rental fleet                 (1,372,109)               (413,173)
   Proceeds from sale of assets                     -                    21,426
   Increase in patent costs                     (67,133)               (122,188)
   Purchase of restricted assets                    -                (3,946,148)
                                             ------------            -----------

Net cash used in investing activities        (3,695,164)             (5,593,098)
                                             -----------             -----------

Cash flows from financing activities:
   Proceeds from borrowings,
     net of costs                            12,319,554              13,080,026
   Increase in book overdraft                   193,999                     -
   Repayments of long-term debt and 
     capital lease obligations               (9,424,355)             (6,002,445)
   Redemption of preferred stock                    -                (1,500,000)
   Proceeds from common stock issuances             -                 3,386,059
   Proceeds from exercise of options and
     warrants                                   878,611                 609,220
   Payment of preferred dividends                   -                  (164,531)
   Payment of bond closing costs                    -                  (179,355)
                                             ------------           -----------

Net cash provided by financing activities     3,967,809               9,228,974
                                            -----------             -----------

Net (decrease) increase in cash                (298,378)                212,072

Cash at beginning of year                       850,332                 638,260
                                           ------------            ------------

Cash at end of year                        $    551,954            $    850,332
                                            ============            ============
</TABLE>
The  accompanying  notes  are  an  integral part  of these financial statements.

                                       F-6
<PAGE>

Tower Tech, Inc.
Statements of Cash Flows (continued)

Supplemental Disclosure of Cash Flow Information

Cash paid for  interest  during the years ended  November  30, 1997 and 1996 was
$760,656 and $540,127, respectively.

Supplemental Schedule of Non-Cash Investing and Financing Activities

The Company converted $125,000 of accounts receivable to notes receivable during
fiscal 1997.

The Company acquired certain  property,  plant and equipment under capital lease
obligations  of $49,427 and $294,505  for the years ended  November 30, 1997 and
1996, respectively.

The Company acquired  certain real estate and improvements  during 1997 and
1996 by  executing  notes  payable  in the  aggregate  amount  of  $139,219  and
$387,500, respectively.

See Note 13 for other non-cash issuances and conversions of preferred stock.




































The  accompanying  notes  are  an  integral part of these financial statements.


                                       F-7


<PAGE>


Tower Tech, Inc.
Notes to Financial Statements

1.     General and Summary of Significant Accounting Policies

General

Tower Tech, Inc. (the "Company") has been in the business of building, repairing
and upgrading conventional water cooling towers since 1985. In 1991, the Company
began  developing a new line of modular water cooling  towers made  primarily of
fiberglass  ("TTMT  Series").  In 1993, the Company began production of the TTMT
Series cooling tower,  which has been introduced into both the air  conditioning
and  industrial  segments of the cooling  tower  market.  Compact  design of the
modules  permits  them  to  be  factory  assembled,  inventoried  for  immediate
shipment,  easily transported and quickly installed.  The Company has also built
cooling  towers  based on the TTMT Series  modules  which the Company  rents for
short-term  or emergency  use to customers.  In 1995,  the Company  introduced a
concrete water cooling tower which is constructed using the TTMT technology. The
concrete  towers,  which are  constructed  using tilt-up  concrete  construction
methods at the customer's  location,  are sold under fixed price  contracts.  In
1996, the Company began marketing its TTMT technology by entering into licensing
agreements with international cooling tower companies.

Revenue and cost recognition

Revenue from TTMT tower sales is recognized as towers are shipped to customers.

Revenues and costs under fixed price contracts for the  construction of concrete
towers are  recognized on the  percentage of completion  method and are recorded
based upon a ratio of costs incurred to date on the contract to total  estimated
costs.  Contract  costs  include  material,  direct labor and other direct costs
related  to  contract   performance.   Changes  in  job  conditions,   estimated
profitability and final contract settlements may result in revisions to cost and
income,  and are recognized in the period in which the revisions are determined.
Provisions for estimated  losses on uncompleted  contracts,  if any, are made in
the period in which such losses are determined.

Rental towers are rented under short-term or  month-to-month  rental  agreements
and revenue is recognized when earned.

Revenues from licensing agreements are recognized when a non-cancelable contract
is  signed  specifying  a  fixed  non-refundable  fee,  the  related  technology
materials  are  delivered  and  government  approval  has been  obtained  by the
licensee, when required. License fees are included in other operating revenue.

Cash and cash equivalents

For  purposes  of the  statement  of  cash  flows,  the  Company  considers  all
short-term  investments  with a  maturity  of  three  months  or less to be cash
equivalents.

Inventory

Inventory  is stated at the lower of cost or  market.  Cost is  determined  on a
first-in, first-out basis.

Property, plant and equipment

Property,  plant and equipment is recorded at cost. Depreciation (which includes
amortization  of  assets  under  capital  leases)  is  provided  for  using  the
straight-line method over the estimated useful lives of the assets as follows:





                                       F-8


<PAGE>


Notes to Financial Statements, continued

1.     General and Summary of Significant Accounting Policies, continued

Property, plant and equipment, continued

         Buildings and plant improvements                      7-40 years
         Shop equipment                                        5-10 years
         Office furniture and equipment                        3-10 years
         Molds and dies                                        7-10 years
         Trucks and vehicles                                      5 years
         Assets under capital lease                            5-10 years

Repairs and maintenance charges which do not increase the useful lives of assets
are charged to expense as incurred.

Interest costs incurred on borrowed  funds during a period of  construction  are
capitalized as a component of the costs of construction of qualifying assets.

Patents

Costs  associated with obtaining  patents are capitalized and amortized from the
date granted over the life of the patents (17 years).

Debt issue costs

Other  assets  relate  primarily to costs  associated  with the issuance of debt
obligations.  Debt issue costs are being  amortized over the life of the related
debt obligations.

Warranty costs

The Company  provides,  by a current  charge to cost of goods sold, an amount it
estimates will be needed to cover future  warranty  obligations  for towers sold
during the year. The accrued liability for warranty costs is included in accrued
liabilities in the accompanying balance sheets.

Income taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No. 109,  "Accounting for Income Taxes" (FAS 109). FAS 109
requires deferred tax liabilities or assets to be recognized for the anticipated
future  tax  effects  of  temporary  differences  that  arise as a result of the
differences in the carrying amounts and tax bases of assets and liabilities, and
for loss carryforwards and tax credit carryforwards.

Research and development

Costs associated with research and development of new and improved  products are
charged to expense as incurred.

Income per common share

Net income per common share is computed based on the weighted  average number of
shares of common  stock  outstanding  plus  dilutive  common  equivalent  shares
arising from the issuance of warrants and options.

Use of estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 dates of the financial  statements and
the  reported  amounts of revenue and  expenses  during the  reporting  periods.
Actual results could differ from those estimates.


                                       F-9


<PAGE>



Notes to Financial Statements, continued

1.     General and Summary of Significant Accounting Policies, continued

Use of estimates, continued

     Estimates  are  used  when  accounting  for  construction  contracts,   the
allowance for doubtful accounts and warranty reserve.  It is reasonably possible
that actual  results could differ  significantly  from the estimates in the near
term.

Fair value of financial instruments

The  Company's  financial   instruments  consist  primarily  of  cash  and  cash
equivalents, and debt instruments.  Fair value estimates have been determined by
the Company,  using  available  market  information  and  appropriate  valuation
methodologies.   These   estimates   are   subjective   in  nature  and  involve
uncertainties  and matters of  significant  judgment,  and  therefore  cannot be
determined with precision.

The  carrying   value  of  cash  and  cash   equivalents  is  considered  to  be
representative  of their  respective  fair values,  due to the short maturity of
these  instruments.  Based on the  borrowing  rates  currently  available to the
Company for loans with  similar  terms and average  maturities,  the fair market
value of long-term debt and notes payable approximates their carrying value.

Concentration of credit risk

Financial  instruments  which  potentially  subject  the  Company to credit risk
consist of cash and cash equivalents,  accounts receivable and notes receivable.
The  Company  maintains  its cash  balances  in high  credit  quality  financial
institutions.  From  time-to-time,  the Company's cash and cash  equivalents may
exceed federally insured limits although management believes any possible credit
risk is minimal.

The Company sells  cooling  towers to customers  throughout  the U.S. and enters
into licensing  agreements  with  international  companies.  The Company extends
credit based upon an evaluation of the customer's financial condition, generally
without  requiring  collateral.  Exposure to losses on accounts  receivable  and
notes receivable is principally dependent on each customer's financial condition
and economic  conditions in countries where they operate.  The Company  monitors
its exposure for credit losses and maintains allowances for anticipated losses.

Stock Options

In October 1995, the Financial  Accounting  Standards Board issued Statement No.
123 ("FAS 123"), "Accounting for Stock Based Compensation".  As permitted by FAS
123, the Company has  continued  its  previous  method of  accounting  for stock
compensation costs and has adopted the disclosure requirements of this Statement
in fiscal 1997.

Earnings Per Share

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 128, Earning Per Share ("FAS 128"). FAS 128
will  change the  computation,  presentation  and  disclosure  requirements  for
earnings  per share.  FAS 128  requires  presentation  of "basic" and  "diluted"
earnings  per share,  as defined,  on the face of the income  statement  for all
entities  with complex  capital  structures.  FAS 128 is effective for financial
statements  issued for periods  ending  after  December  15,  1997 and  requires
restatement  of all prior  period  earnings per share  amounts.  The Company has
determined  that FAS 128 will not have a  material  impact on its  earnings  per
share when adopted.

Reclassifications

Certain  November  30,  1996  amounts  have been  reclassified  to conform  with
November 30, 1997 presentation.


                                      F-10


<PAGE>



Notes to Financial Statements, continued

2.     Contract Receivables

Contract receivables consist of the following at November 30:
<TABLE>
                                                      1997            1996
                                                 -------------    -------------
     <S>                                            <C>              <C>
     Completed contracts, including retainage       $419,904         $540,762
     Contracts in progress:
       Current accounts                              190,141          604,794
       Retainage                                      59,411          104,385
                                                   ----------        ----------

                                                    $669,456       $1,249,941
                                                 ============      ============
</TABLE>
Contract  receivables  are included in accounts  receivable in the  accompanying
balance sheet.

3.     Costs in Excess of Billings and Estimated Earnings on Uncompleted
       Contracts

The  following  is a summary  of costs and  estimated  earnings  on  uncompleted
projects at November 30:

<TABLE>
                                                      1997              1996
                                                 --------------    -------------
     <S>                                           <C>              <C>
     Cost incurred on uncompleted projects         $ 2,010,501      $ 1,996,271
     Estimated earnings                                 22,356          (15,428)
                                                   -----------      -----------

                                                     2,032,857        1,980,843
     Less:  Billings to date                        (1,313,410)      (1,509,127)
                                                   -----------      -----------

                                                   $   719,447      $   471,716
                                                   ===========      ===========
</TABLE>

4.     Inventories

Inventories consist of the following at November 30:
<TABLE>
                                                    1997                1996
                                                ------------        ------------
     <S>                                          <C>                <C>
     Raw materials                                $2,070,717         $2,317,411
     Work in process                                 476,498            305,209
     Finished goods                                  480,441            296,644
                                                  ----------         ----------
        
                                                  $3,027,656         $2,919,264
                                                  ==========         ==========
</TABLE>













                                      F-11


<PAGE>


Notes to Financial Statements, continued

5.     Restricted Assets

Restricted  assets consist of investments  held by a trustee in connection  with
financing  obtained to fund  construction of the Company's new manufacturing and
office  facility.  See Note 6. Amounts  required for  obligations  classified as
current  liabilities are reported in current  assets.  Investments are stated at
cost which approximates market. The composition of restricted assets at November
30, is set forth in the following table:
<TABLE>
                                                      1997               1996
     <S>                                          ----------         ----------
     Under bond indenture agreements -            <C>                <C>
       held by trustee:

     Cash and cash equivalents                    $    1,917         $    3,555
     U.S. Treasury Notes                             158,551          3,942,593
                                                   ----------         ----------

     Total restricted assets                         160,468          3,946,148

     Amount required for current
       liabilities                                  (160,468)          (373,532)
                                                   ----------         ----------

     Noncurrent restricted assets                  $     -           $3,572,616
                                                   ==========         ==========
</TABLE>
6.     Property, Plant and Equipment

Following is a summary of property, plant and equipment at November 30:
<TABLE>
 
                                                    1997                1996
                                                 -----------         -----------
     <S>                                          <C>                <C>
     Building and plant improvements              $1,824,683         $1,782,661
     Shop equipment                                  767,798            504,441
     Office furniture and equipment                  663,122            298,824
     Molds and dies                                1,274,782          1,117,156
     Trucks and vehicles                               9,744                -
     Assets under capital lease                      556,633            507,206
     Construction in progress                      5,554,826            564,686
     Capitalized interest                            380,304             27,932
                                                  ----------         ----------

                                                  11,031,892          4,802,906

     Accumulated depreciation                     (1,292,965)          (948,986)
     Accumulated depreciation, capital leases       (134,669)           (79,711)
                                                  ----------         ----------

                                                  $9,604,258         $3,774,209
                                                  ==========         ==========
</TABLE>
Construction in progress consists primarily of construction on the Company's new
manufacturing  facility in south Oklahoma City,  Oklahoma.  The new facility has
been  partially  financed  through an  industrial  revenue bond  issuance by the
Oklahoma  Industries  Authority  in  the  amount  of  $4,405,000.  See  Note  8.
Management  estimates the Company's total investment in the new facility,  which
is scheduled for completion in 1998, will be approximately $9 million, including
$3.5 million to equip the facility

Depreciation of property, plant and equipment, and rental fleet was $586,062 and
$411,575 for the years ended November 30, 1997 and 1996, respectively,  of which
$425,872 and $297,870 was included in costs of good sold and constructed.





                                      F-12


<PAGE>

Notes To Financial Statements, Continued

7.    Rental Fleet

The  Company  has a fleet  of TTMT  Series  modular  cooling  towers  which  are
available for lease under short-term and month-to-month  agreements.  The rental
fleet is depreciated using the straight-line  method over estimated useful lives
of 7 to 10 years.  Following  is a summary of the rental  fleet and  accumulated
depreciation at November 30:
<TABLE>
                                                     1997               1996
                                                  ----------         -----------
     <S>                                          <C>                <C>
     Rental fleet                                 $2,386,687         $1,014,578
     Accumulated depreciation                       (362,949)          (177,087)
                                                  ----------         ----------

                                                  $2,023,738         $  837,491
                                                  ==========         ==========
</TABLE>
8.       Long-Term Debt

The following is a summary of long-term debt at November 30: 
<TABLE>
               
                                                   1997                1996
                                                -----------         -----------

   <S>                                           <C>               <C>
   10% Convertible Subordinated Debenture
   ("Debentures") as discussed below.            $6,000,000        $       -  

   Oklahoma Industries Authority Revenue Bonds,
   Series 1996, principal and interest
   are payable  quarterly on January 1,
   April 1, July 1 and October 1;  interest at
   an average rate of 7.28%,  final payment is
   due October 1, 2007;  collateralized
   by the Company's  right,  title and interest
   in the real estate  comprising  the
   Company's manufacturing facility, along with
   all building, structures,  fixtures
   and  improvements on said real estate; 
   bonds are eligible for early  redemption
   subject to certain restrictions.               4,335,000           4,405,000

   Line of credit payable to an individual
   credit limit of $2,000,000; principal
   and interest due May 31, 1998; interes
   rate of 13%; collateralized by accounts
   receivable, inventory, equipment, and
   personal guarantee of the Company's 
   C.E.O. and his wife. Replaced with new
   financing subsequent to year-end.
   See Note 17.                                     499,507           2,000,000

   Notes payable to an individual; principal
   payments of $1,500,000 and $500,000 due
   on May 8, and March 25, 1999, respectively;
   interest at bank prime + 3% (11.25% at
   November 30, 1997), and fixed rate at 13%,
   respectively; collateralized by a first
   lien and right of assignment on certain
   patents.                                       2,000,000           1,500,000

   Line of credit with a bank; credit limit
   of $3,800,000; principal and interest due
   September 1, 1997; interest at 30 day
   LIBOR plus 1%; collateralized by all
   accounts, equipment, general intangibles
   instruments, documents and chattel paper.             -            1,325,000

   Note payable to an individual; principal
   and interest due August 1, 1997;
   interest at 3.5%; collateralized by real
   estate                                                -              387,500

                                      F-13
<PAGE>
Notes To Financial Statements, Continued

8.     Long-Term Debt, continued
                                                     1997               1996
                                                 -------------     -------------

   Line of credit with a bank; principal
   and interest due April 1, 1999;
   interest at bank prime (10% at
   November 30, 1997); collateralized 
   by real estate.                                 251,625              500,000

   Note payable to a bank; 35 monthly
   payments of principal and interest of
   $1,557 with remaining principal due
   April 15, 1998; interest at bank
   prime (10% at November 30, 1997);
   collateralized by real estate.                   96,223              104,908

   Note payable to an individual; 
   principal due May 2, 1999; interest
   at 15% due quarterly; collateralized
   by accounts receivable, inventory,
   equipment, all other chattels, patent
   and personal guarantee of the Company's 
   C.E.O. and his wife.                                -                100,000

   Note payable to a bank; semi-annual
   payments of principal and interest of
   $1,557 with final payment due October 
   13, 1998; interest at bank prime
   (10% at November 30, 1997);
   collateralized by real estate.                    71,879              75,973

   Note payable to a lending institution; 
   principal and interest payments of
   $13,651 with final payment due November 3,
   2002; interest at 10%; collateralized by
   certain equipment.                                731,890                -

   Notes payable to an institution; monthly
   principal and interest payments
   of $977, with final payment due November 4,
   2017; interest at 7.72%,
   collateralized by certain improvements.            119,219               -

   Various notes payable to financial 
   institutions; principal and interest 
   due monthly; collateralized by vehicle
   and equipment.                                       22,768           42.832 
                                                     ----------       ----------
              
                                                     14,128,111      10,441,213

       Current portion                                 (439,308)     (2,919,113)
                                                     -----------     -----------

       Long-term debt, net                          $13,688,803     $ 7,522,100
                                                     ==========      ===========
</TABLE>

Principal  amounts  maturing  on  long-term  debt for each year is as follows at
November 30, 1997:
<TABLE>
              <C>                                                 <C>
              1998                                                $     439,308
              1999                                                    3,218,342
              2000                                                    6,606,633
              2001                                                      505,521
              2002                                                      554,106
              Thereafter                                              2,804,201
                                                                    ------------

</TABLE>
                                                                    $14,128,111
                                      F-14

<PAGE>
Notes To Financial Statements, Continued

8.     Long-Term Debt, continued

The  Debentures  were  issued by the Company  during the third  quarter of 1997,
yielding net proceeds of approximately $5,467,000.  The Debentures bear interest
at 10 percent,  which is payable semiannually,  and mature on June 10, 2000. The
principal  balance of each Debenture is convertible  into shares of common stock
at a price of $8.75 per share at the option of each  Debenture  holder or at the
option of the Company if the closing  price of the common stock is at least 175%
of the conversion price for 20 of 30 consecutive  trading days and certain other
conditions are satisfied.

In September  1997,  the Company  entered into a loan agreement with the City of
Oklahoma  City under which a HUD Section 108 loan in the amount of $1,250,000 is
available to the Company for start-up expenses of the manufacturing facility and
associated working capital requirements.  As of November 30, 1997, none of these
funds had been advanced to the Company.  Initially the loan bears interest at 20
basis  points  above the LIBOR rate,  adjusted  monthly,  and  interest  only is
payable  quarterly.  When HUD provides  permanent  financing,  the interest rate
becomes  fixed at the rate charged by HUD to the City and principal and interest
are payable quarterly based on an eight-year  amortization  period.  The loan is
collateralized by a second mortgage on the manufacturing facility.

9.     Obligations Under Capital Leases

The Company  leases  certain  equipment  under  capital  lease  agreements.  The
equipment  leases have original terms ranging from 3 to 5 years.  Most equipment
leases have  purchase  options at the end of the  original  lease  term.  Future
minimum payments by year and in the aggregate under noncancelable capital leases
consist of the following at November 30, 1997:
<TABLE>
       <C>                                                         <C>
       1998                                                        $    160,082
       1999                                                             150,873
       2000                                                              33,404
       2001                                                              14,302
                                                                    ------------

        Total minimum lease payments                                    358,661
        Amount representing interest                                    (57,675)

              Present value of net minimum lease payments               300,986

        Current portion                                                (129,079)

                                                                    $   171,907
</TABLE>
10.     Retirement Plan

Effective June 8, 1990, the Company  implemented  the Tower Tech,  Inc.,  401(k)
Retirement Plan (the "Plan"), a voluntary, contributory 401(k) savings plan. The
Plan currently permits employees of the Company to commence participation in the
Plan as of the first  January 1 or July 1  following  the  completion  of twelve
months of service and the attainment of 18 years of age.  Participants  may make
tax-deferred  contributions from their compensation during each year, subject to
statutory limits imposed under Section 401(k) and other  applicable  sections of
the  Internal  Revenue  Code of  1986,  as  amended.  The  Plan  provides  for a
discretionary  matching contribution by the Company. The matching  contribution,
if any, is allocated to  participants  based on a  percentage  of  participant's
eligible  contributions  compared  to  total  eligible  contributions.  Eligible
contributions  are  the   participant's   contributions  not  to  exceed  6%  of
compensation.

Participants  in the Plan are at all times fully  vested in their  contributions
and in the earnings  attributable to their contributions and become fully vested
in Company  contributions made on their behalf after seven years of service. The
Plan permits  withdrawals  during  employment  in the event of proven  financial
hardship.  In the case of  termination of  employment,  disability,  or death, a
participant's  account  balance  is  distributed  to  the  participant  (or  his
beneficiary)  in  either  a lump sum or a part  lump  sum and part  installments
depending on the participant's  vested balance.  The expense  recognized in 1997
and 1996 for the Plan was $1,030 and $1,690, respectively.
                                      F-15


<PAGE>



Notes To Financial Statements, Continued

11.    Income Taxes

The  (benefit)  provision  for income taxes for the years ended  November 30 are
comprised of the following:
<TABLE>
                                                  1997               1996
     <S>                                         ----------         ----------
     Current provision:                      <C>                <C>
           Federal                           $   29,101         $     --
                                              ----------         ----------

      Deferred benefit:
           Federal                              (552,976)              --
           State                                 (92,044)              --
                                              ----------         ----------

           Total deferred benefit               (645,020)              --
                                              ----------         ----------

      Income tax benefit                      $ (615,919)        $     --
                                              ==========         ==========
</TABLE>
     The following is a reconciliation of the statutory federal
     income tax rate to the Company's effective income tax rate:
<TABLE>
                                                    1997               1996
                                                 ----------         ----------
           <S>                                    <C>                 <C>
                  Statutory federal income tax        34%                34%
                  Utilization of net operating
                    loss carryforwards               (29%)              (23%)
                  Change in valuation allowance      (52%)              (19%)
                  Other                                4%                 8%
                                                 ----------         ----------

                  Effective income tax rate          (43%)                -
                                                 ==========         ==========
</TABLE>
Deferred  tax  liabilities  and  assets  at  November  30 
are comprised of the following:

<TABLE>
                                                   1997                1996
     <S>                                         ----------        -----------
     Deferred tax liabilities:                <C>                <C>
         Depreciation                         $  289,743         $  140,351
         Workers' Compensation                    40,984                -
                                              ----------         ----------

         Total deferred tax liability            330,727            140,351
                                              ----------         ----------

     Deferred tax assets:
         Accounts receivable allowance            68,471              8,546
         Warranty reserve                         39,660             37,740
         Other                                     7,848             22,158
         Net operating loss carryforward         827,513          1,242,608
         AMT credit                               32,255                -
                                              ----------         ----------

         Total deferred tax assets before
           valuation allowance                   975,747           1,311,052
         Valuation allowance for deferred 
           tax assets                                -            (1,170,701)
                                              ----------          ----------

         Total deferred tax asset                975,747            140,351
                                              ----------          ----------

                  Net deferred tax asset     $  645,020          $      -
                                              ==========         ==========

</TABLE>
At November 30, 1997,  the Company had a net operating loss  carryforward  (NOL)
for regular tax purposes of approximately $2,087,000, expiring in 2009 to 2010.

                                      F-16
<PAGE>
Notes To Financial Statements, Continued

11.    Income Taxes, continued

FAS 109 requires that the Company  record a valuation  allowance when it is more
likely than not that some  portion or all of the deferred tax assets will not be
realized.  The ultimate realization of the deferred income tax assets depends on
the Company's  ability to generate  sufficient  taxable income in the future. In
the fourth  quarter of fiscal 1997,  Management  determined  that,  based on the
Company's  ability to generate taxable income in two consecutive years (1996 and
1997), it is more likely than not that the Company will realize the deferred tax
assets.  Therefore,  the valuation allowance previously  established against the
net deferred tax asset was reversed.

The  ability of the  Company to utilize the NOL  carryforward  to reduce  future
income  taxes  may  be  limited  upon   occurrence  of  certain   capital  stock
transactions  during any three-year  period resulting in an aggregate  ownership
change of more than 50%.

12.    Related Party Transactions

R&B Enterprises  ("R&B"),  an affiliate of Lincoln E. Whitaker who is a director
of the Company,  is an independent sales  representative  for the Company.  As a
sales  representative,  R&B  purchases  products from the Company for resale and
sells  products as an agent for the Company on a commission  basis.  During 1997
and 1996, R&B purchased $29,086 and $253,034, respectively, of products from the
Company and earned $7,872 and $32,343, respectively, in commissions.

In December  1995,  the Company  executed a Joint Venture  Agreement with J-Tech
Enterprises,  Inc.  ("J-Tech"),  a Florida  corporation  to market the Company's
products in Alabama,  Florida and Georgia.  The Company received a 50% ownership
interest in the joint venture, Tower Tech-Southeast ("TTSE"), for contributing a
license to use its  technology.  J-Tech  contributed a computer system valued at
$5,000 and $35,000 cash. The Company's investment in TTSE is being accounted for
using the equity  method of  accounting,  although the Company did not record an
amount for their initial  contribution of technology.  The agreement  contains a
buyout option allowing the Company to purchase the ownership  interest of J-Tech
under certain  conditions.  Sales made to TTSE amounted to $741,240 and $549,549
during fiscal year 1997 and 1996, respectively.

The following represents the summarized financial data of TTSE at November 30:

<TABLE>
                                                  1997               1996
     <S>                                         -----------        ----------
     Balance sheet data                       <C>                <C>
     Assets                                   $  531,307         $  520,114
     Liabilities                              $  463,002         $  452,773
     Equity                                   $   68,305         $   67,341




                                                  1997               1996
                                              ----------         -----------

     Statement of operations data
     Sales                                    $1,172,410         $  751,499
     Cost of Sales                               814,797            611,625

     Other expenses                              356,649            152,532
                                              ----------         ----------

     Net income (loss)                        $      964         $  (12,658)
                                              ==========         ==========

</TABLE>

                                      F-17


<PAGE>


Notes To Financial Statements, Continued

13.    Stockholders' Equity

At November 30, 1997, and 1996, the Company had outstanding warrants and options
allowing  the holders to purchase a total of  approximately  344,065 and 424,480
shares respectively,  of the Company's Common Stock at an average price of $6.81
per share  expiring at various  periods  through July 2007.  These  warrants and
options were issued in  conjunction  with the initial public  offering,  various
financing  agreements with unrelated  individuals and the Company's stock option
plan (see Note 14).  Warrants for 150,000 and 84,400 shares of common stock were
exercised at an average  exercise price of $5.88 and $6.41 during 1997 and 1996,
respectively.

In January  1996,  the Company  sold  300,000  shares of common  stock,  through
private placements, at a price of $4.00 per share. The Company used the proceeds
of $1,200,000 for working capital and payment of debt.

In February  1996,  the Company sold 350,000  shares of common stock,  through a
private  placement,  at a price of $6.60 per  share.  The  Company  used the net
proceeds of $2,205,000 for (i) redemption and retirement of all the  outstanding
shares of Series D Preferred Stock and to repurchase  certain patent rights from
the holder of the Series D Preferred Stock, (ii) payment of accrued dividends on
the Series B Preferred Stock and Series D Preferred  Stock, and (iii) payment of
certain debt obligations and all accrued interest thereon. On March 22, 1996 the
Company  redeemed  the 150,000  shares of Series D  Preferred  Stock for $10 per
share,  and the Series B Preferred  Stock was  converted  into 70,000  shares of
common stock.

In December  1995,  the Series C Preferred  Stock was  redeemed in exchange  for
Series E  Preferred  Stock.  In April  1996,  the Series E  Preferred  Stock was
purchased  in exchange  for the  issuance of 130,667  shares of common stock and
$18,941.

14.     Stock Option Plan

In October 1997, the Company amended the Tower Tech, Inc. 1993 Stock Option Plan
(the "Plan"). Under the Plan, up to 500,000 shares of common stock may be issued
pursuant to the  exercise of options.  The Plan is  administered  by a committee
consisting  of at  least  two  members  of the  Board of  Directors  who are not
employees of the Company.  The committee has not established a fixed formula for
awarding  options  under the Plan.  Options under the Plan can be in the form of
incentive  stock options or nonqualified  stock options.  The exercise price for
nonqualified  stock  options  issued under the Plan may be for more or less than
the fair market value of the common stock at the time an option is granted.  The
exercise  price for  incentive  stock  options  must be equal to the fair market
value of the common stock at the time the options are  granted.  There have been
no stock  options  issued with an exercise  price less than the market  price of
common stock at the date of issuance.  All stock options granted during 1996 and
1997 have a term of ten  years  and vest  incrementally  20% each  year.  Vested
options may be exercised after five years of employment or upon termination from
the Company.  The Company has elected to follow APB No. 25, Accounting for Stock
Issued to Employees and related  Interpretations  in accounting for its employee
stock  options.  Under APB No. 25,  compensation  expense is recognized  for the
difference between the option price and market value on the measurement date. No
compensation expense has been recognized because the exercise price of the stock
options equaled the market price of the underlying stock on the date of grant.

Pro forma information regarding net income and earnings per share is required by
FAS No. 123 and has been  determined  as if the  Company had  accounted  for its
employee  stock options under the fair value method of the  Statement.  The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average  assumptions for fiscal
1997 and 1996, respectively:  interest rates (zero-coupon U.S. government issues
with a remaining  life equal to the  expected  term of the options) of 6.12% and
6.67%;  dividend  yields of 0.0% and 0.0%;  volatility  factors of the  expected
market  price  of  the  Company's  common  stock  of  43.95%  and  43.95%;   and
weighted-average expected life of the options of six years.



                                      F-18
<PAGE>
Notes To Financial Statements, Continued

14.      Stock Option Plan, continued

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

The Company's pro forma information follows for November 30:
<TABLE>
                                                  1997               1996
                                              ----------         -----------
     <S>                                      <C>                <C>
     Net income (loss) as reported            $2,062,951         $  565,118
     Pro forma                                $2,006,279         $  492,436
     Earnings (loss) per share as reported    $      .58         $      .15
     Pro forma                                $      .57         $      .15
</TABLE>

For  purposes  of the pro forma  disclosures,  the  estimated  fair value of the
options is amortized to expense over the options' vesting period,  which is five
years.  Because the Company's  stock options vest  generally over five years and
additional  awards are typically made each year, the above pro forma disclosures
are not likely to be  representative  of the effects on pro forma net income for
future  years.  A summary of the  Company's  stock  option  activity and related
information follows for November 30:


                                 1997                        1996
                       ----------------------      ------------------------
<TABLE>                        
                         Options   Weighted Av        Options   Weighted Avg.
<S>                                 Exercise Price                Exercise Price
Outstanding -            <C>        <C>               <C>        <C> 
  Beginning of year      210,880    $ 6.28            169,760    $ 6.25
Granted                   34,894      8.75             75,680      6.33
Exercised                 (5,120)     6.25             (6,880)     6.25
Forfeited                 (29,760)    6.46            (27,680)     6.25
                        ---------                     --------

Outstanding -
  End of year             210,894     6.67             210,880     6.28
                          =======                      =======

Exercisable -
  End of year              83,175     6.25               52,312    6.25
                          ========                      ========
</TABLE>

The following table summarizes  information  about stock options  outstanding at
November 30, 1997:

<TABLE>
                                          Weighted Avg.
        Range of          Number           Remaining       Weighted Avg.
     Exercise Prices   Outstanding      Contractual Life   Exercise  Price
     <C>      <C>        <C>                 <C>              <C>
     $ 6.25 - $ 8.25     192.800             7.43             $  6.43
     $ 9.00 - $10.00      18,094             9.56             $  9.21
     $ 6.25 - $10.00      210,894            7.62             $  6.67
</TABLE>



                                      F-19

<PAGE>

Notes To Financial Statements, Continued

15.    Commitments and Contingent Liabilities

In July 1993,  the Company  entered into an agreement  with a vendor to purchase
all  reinforced  plastic  components  and dies from the vendor for the next five
years.  The Company has a secured  credit  agreement with the vendor whereby the
Company  will be extended  credit not to exceed  $1,200,000  for the purchase of
components  ($158,286  outstanding and included in accounts  payable at November
30,  1997).   The  credit   agreement  is  renewable   every  6  months  and  is
collateralized  by  purchased  inventory,  personal  guaranty  of the  Company's
C.E.O.,  and a pledge of 150,000  shares of Company  common  stock  owned by the
Company's C.E.O.

On April 5, 1994,  the Company  executed a vendor  agreement with another vendor
whereby the Company has committed to purchase, annually (measured from agreement
date), a minimum of $1,500,000 of cooling tower fill and drift  eliminators from
the vendor.  If the Company does not meet the minimum purchase amount in any one
year, the vendor agreement will be extended in time by the percentage  amount of
the shortage added in months to the original length of the agreement. Management
believes that the minimum purchase amount will be met through normal  operations
over the term of the agreement (5 years).

Included in cost of goods sold and  constructed for the years ended November 30,
1997 and 1996 are $426,699 and  $358,016,  respectively,  of expense to retrofit
and service  towers  previously  sold.  The Company has recorded a liability for
estimated  warranty  costs of  $100,000  at both  November  30,  1997 and  1996.
Management  believes the warranty reserve is sufficient to cover future warranty
costs.

The Company is a defendant in certain litigation arising in the normal course of
business.  Management is of the opinion that  liabilities,  if any, arising from
these  actions  will not  have a  material  effect  on the  Company's  financial
position and results of operations.

16.    Licensing Agreements

During 1997 and 1996, the Company entered into certain  license  agreements with
various international cooling tower companies.  The license agreements grant the
licensees  an  exclusive,  nontransferable  right and  license  to  manufacture,
develop and promote cooling towers,  using the Company's technology in specified
regions, such as Mexico, India,  Southeast Asia, South America, South Africa and
the  Mediterranean  area.  Under the  agreements,  the Company  earns an initial
fixed,  nonrefundable  technology  transfer fee upon delivery of the  technology
materials.  Fees earned during the year ended November 30, 1997 and 1996 totaled
$860,495 and $839,983, respectively. Pursuant to certain agreements, the Company
will  earn  continuing  royalties  for all  Licensed  Products  promoted  by the
licensee, although no such royalties have been earned through November 30, 1997.

The agreements with two  international  cooling tower companies give the Company
an option to purchase 49% of a company set up to market cooling towers using the
TTMT technology in specified regions.  At November 30, 1997, the Company has not
exercised these options.


17.    Subsequent Events

Effective  December 31,  1997,  the Company  entered  into a $3,500,000  line of
credit agreement with a financial  institution for working capital  requirements
and completion of the Company's new facility in Oklahoma City. A portion of this
financing  was used to  replace a line of credit to an  individual  which had an
outstanding balance of $499,507 at November 30, 1997. Therefore,  this amount is
classified as long term at November 30, 1997.  Interest is payable  monthly at a
rate of two basis points over  National  Prime.  All  outstanding  principal and
unpaid  interest is due June  30,1999.  The agreement is  collateralized  by all
accounts, other than arising from sales to foreign nationals, inventory, general
intangibles, rental fleet inventory and patents.

                                      F-20
<PAGE>

                                INDEX TO EXHIBITS


                                                                           Page

10.18        Promissory Note between Tower Tech, Inc. and Southwestern
             Bank & Trust Company dated December 31, 1997. . . . . .        E-1

23.1         Consent of Coopers & Lybrand L.L.P   . . . . . . . . . . . .   E-2
            






































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