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, 1996

[    ]  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            (I.R.S. Employer Identification No.)
 incorporation or organization)

Rural Route 3, PO Box 1838, Chickasha, Oklahom                       73023
  (Address of principal executive of                               (Zip Code)

Issuer's telephone number 405/222-2876

Securities registered under Section 12(b) of the Exchange Act:

      Title of each class             Name of each exchange on which registered

  common stock, par value $.001                    Boston Stock Exchange

Securities registered under Section 12(g) of the Exchange Act:

                                      None
                                (Title of class)

       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


<PAGE>


       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.  $18,636,527

       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).  $18,914,704 based on 1,823,104 shares at $10.375 per share, the last sale
price of the Common Stock on February 19, 1997.


                         (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.  3,370,368  shares  as of
February 19, 1997.

                       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 list  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












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                                TABLE OF CONTENTS

                                     Part I

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

Item 2.   Properties.....................................................9

Item 3.   Legal Proceedings..............................................9

Item 4.   Submission of Matters to a Vote of Security Holders............9

                                     Part II

Item 5.   Market for Registrant's Common Equity and Related
               Stockholder Matters.......................................10

Item 6.   Management's Discussion and Analysis of Financial
               Condition and Results of Operations.......................10

Item 7.   Financial Statements...........................................14

Item 8.   Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure.......................14

                                    Part III

Item 9.   Directors and Executive Officers of the Registrant.............16

Item 10.  Executive Compensation.........................................16

Item 11.  Security Ownership of Certain Beneficial Owners and
               Management................................................16

Item 12.  Certain Relationships and Related Transactions.................16

                                     Part IV

Item 13.  Exhibits and Reports on Form 8-K...............................17

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

          Index to Exhibits..............................................22







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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 Company has also recently introduced a
modular  concrete  cooling tower 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, a bottom-mounted
direct  drive  motor  fan  assembly  and a modular  design to create a  compact,
efficient  cooling  tower which  management  believes  reduce many  deficiencies
associated  with other cooling  towers,  which do not  incorporate  all of these
design features.  Individual  modules can be utilized for small air conditioning
or light  industrial  applications,  and the modular  design  allows a number of
modules  to  be  connected  in  a  series  for  large   industrial   or  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 new modular
concrete tower features tilt-up concrete  construction and incorporates  many of
the innovative  characteristics  of the TTMT Series  cooling tower.  The Company
also leases TTMT Series modules to customers for temporary or emergency use.

       The Company was founded in 1984 by Mr.  Harold Curtis and has been in the
business of building,  repairing  and  upgrading  forced draft and induced draft
cooling towers since 1985.  Although the Company has the resources to compete in
this aspect of the cooling  tower  business,  the Company is not focusing on the
construction,  repair or maintenance of conventional cooling towers.  Management
believes that the Company's modular cooling towers can be competitively marketed
to those  customers who would  otherwise be in the market for a cooling tower of
standard  design or for repair or upgrade of such cooling  towers.  In 1989, the
Company  developed a mobile  auxiliary  cooling tower and constructed a fleet of
mobile  towers for lease to  customers.  In October  1992,  the Company sold its
fleet of mobile auxiliary  cooling towers and related patents.  A portion of the
proceeds from this sale were used to fund development of the TTMT Series cooling
tower.  In 1990,  Mr. Curtis began  developing a spray nozzle for use in cooling
towers which was intended to operate more efficiently and with fewer maintenance
requirements  than nozzles which were currently  available.  As a result of this
development activity,  the Rotary Spray Nozzle was completed in 1991 and patents
were issued on the  technology in 1992.  The Company has been selling the Rotary
Spray Nozzle to its competitors  since 1992,  primarily for replacement parts in
cooling towers of standard  design,  and has also  incorporated the Rotary Spray
Nozzle into its cooling  towers.  In 1991,  the Company began initial design and
prototyping of a modular  cooling tower which used the Rotary Spray Nozzle.  The
end result of this process was the Company's line of TTMT Series cooling towers.
During  fiscal  1995,  the Company  expanded  its product  line by  developing a
modular concrete tower for application to the industrial and utility segments of
the cooling tower market.

The Cooling Tower Market

       The  market for  cooling  towers  can be broken  down 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 500 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.
                                        4
<PAGE>

       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
fabricated 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 on this limited
information and management's evaluation of the market, management estimates that
the total annual United States  cooling tower market ranges from $200 million to
$300 million and that the total annual worldwide market ranges from $600 million
to $700 million.

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 energy  efficient,
corrosive 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 such towers exacerbates  recirculation  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 end of the 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 a
self-contained  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 over height permits.
The  self-containerized  module has been readily shipped to foreign customers as
well.

       Management  believes that a problem with some 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 results in unnecessary 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  primarily  for use in the TTMT Series  cooling  tower.  The Rotary
Spray  Nozzle  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 1 inch above the fill media with lower  operating  pressure
than most conventional nozzles.  Since conventional nozzles typically operate at
distances of up to 24 inches above the fill media,  the Rotary Spray Nozzle adds
increased performance and significantly reduces pump head requirements.

       In addition to reduced pump head requirements  attributable to the Rotary
Spray  Nozzle,  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  louvers.  This results in reduced  operating  costs for the
TTMT Series cooling tower as compared to 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 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 water collection  system of the TTMT Series cooling tower 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.  There
are two  levels  of water  collectors.  The  first  level is for  primary  water
collection and the second level is to collect mist droplets and direct them back
into the water basin,  which is designed to leave the fan area  completely  dry.
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 lead to  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.

The Modular Concrete Cooling Tower

       In December 1994, the Company  introduced  its modular  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 to the time  required to build a similar
size wood or conventional concrete tower.
                                        6
<PAGE>


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 over forty 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 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 concrete  cooling towers.  Mr. Curtis has
also granted an  exclusive,  royalty-free  license to the Company for the Rotary
Spray Nozzle 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.  The Rotary
Spray Nozzle can also be used in other fluid distribution  systems, such as lawn
sprinklers, pond aeration, and moving fluidized solids such as grain. Mr. Curtis
has retained  all rights with respect to the Rotary Spray Nozzle  patents in all
applications other than cooling towers.

Product Design and Development

       The  Company  spent  $386,474,  $108,183  and  $29,169  on  research  and
development during fiscal years 1996, 1995 and 1994,  respectively.  The Company
is continuously  evaluating its products and manufacturing  methods. The Company
does not have any  significant  products other than the TTMT Series and concrete
cooling  towers  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.

Assembly of Products

       The Company's products are assembled at its plant in Chickasha, Oklahoma.
During 1994, the Company completed the process of outsourcing the manufacture of
all fiberglass  component parts,  many of which are manufactured for the Company
using pultrusion or extrusion molding technology. Generally, management believes
that it is more  advantageous to subcontract out the  manufacturing  part of its
business  to  suppliers  who have  the  capability  to  produce  the  fiberglass
components  using  advanced  manufacturing  methods.  However,  after a detailed
review of the  manufacturing  process of its water collection parts, the Company
decided to bring this  process  back into  Company  operations  in order to help
ensure and control  quality,  supply,  and costs of  production  of these parts.
Accordingly,  in December  1995,  the  Company  invested  in the  equipment  and
personnel  necessary  to  extrude  the  plastic  parts for its water  collection
system.  The  Company  also casts some of the  concrete  component  parts of the
concrete towers.

Suppliers and Vendors

       The Company relies upon  suppliers for most  components and parts used to
make its products.  The Rotary Spray Nozzle is purchased  from a vendor who uses
the Company's tools and dies. Most parts and components purchased from suppliers
are available from multiple sources.  In some cases, the Company has invested in
tools and dies which are used by suppliers in the  manufacture of components for
the Company. If the Company were to switch suppliers,  in some cases it would be
required  to incur  additional  tooling  costs  and might  experience  delays in
obtaining  component parts necessary for the fabrication of completed  products.
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.
                                        7
<PAGE>

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 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 and the  Mediterranean  area.  Also,  negotiations are in
process for similar arrangements for the Philippines,  Taiwan, Japan, the Middle
East, 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 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, 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.

Warranties and Customer Service

       The Company provides a five-year 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 1996,  the Company
incurred  $358,000 of expenses to retrofit  and service  towers,  as compared to
$779,000 during fiscal 1995. 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   applicable  to  it,  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.

       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  and 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 not develop and produce a product which is comparable or
superior to the Company's products.



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Employees

       As of November  30,  1996,  the Company  had 129  employees.  None of the
Company's employees is subject to a collective bargaining agreement. The Company
believes that relations with its employees are good.

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  is  constructing  a new  manufacturing  facility  of
approximately  98,000 square feet which will house its fiberglass tower assembly
operations. Construction is approximately 30 percent complete and is expected to
be completed in May 1997. An office facility of  approximately  16,000 to 24,000
square feet will also be  constructed  on the site.  Construction  on the office
facility  is  expected  to begin in March or April and be  completed  in July or
August of 1997.  The  Company  will move its  general  headquarters  to this new
office  facility when it is  completed.  The new  facilities  have been financed
through an industrial revenue bond issuance by the Oklahoma Industries Authority
("OIA") in the amount of $4,405,000.  Management  estimates the Company's  total
investment in the new facilities will be $7.5 million, including $1.5 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 manufacturing  facility is expected to increase efficiency of the
fiberglass  operations.  The ceiling  height and  configuration  of the existing
facility  limits  production  methods.  The new  facility  should be adequate to
support annual fiberglass tower sales of approximately $50 million and should be
adequate  to support  the  fiberglass  operations  for  several  years.  The new
facility  also will be closer to major  transportation  routes  and  facilities,
particularly  the Oklahoma  City airport.  Management  plans to use the existing
facility  in  Chickasha  to  house  the  Company's  concrete  tower  operations.
Currently, much of the concrete operations are conducted outdoors.

Item 3.  Legal Proceedings

       The Company is not subject to any legal  proceedings  and is not aware of
any pending or threatened legal proceedings.

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.













                                        9


<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 Common Stock is also listed on the
Boston Stock  Exchange.  The following  table shows the high and low closing bid
prices  for the  Common  Stock as  reported  by NASDAQ  for each  quarter  since
November 30, 1993, the date of the Company's  initial public offering.  Prior to
that  date,  there was no market  for the  Company's  Common  Stock.  Bid prices
represent prices between dealers, do not include retail mark-ups,  mark-downs or
commissions, and may not represent actual transactions.

<TABLE>
<CAPTION>

          
           Quarter Ended                          High              Low
       <S>                                   <C>               <C>   
       February 28, 1994 .........           7-1/8             5-3/4
       May 31, 1994 ..............           5-7/8             4-5/8
       August 31, 1994 ...........           5                 3- 3/4
       November 30, 1994 .........           4-1/2             2-5/8
       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
</TABLE>

       On February 19, 1997, the last sale price of the Common Stock as reported
by NASDAQ was $10.375 per share. On February 19, 1997, 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. During 1991 and 1992, the majority of the Company's revenues were derived
from conventional cooling tower projects. Beginning in 1991, 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 a new modular  concrete  cooling tower
during  1994.  This new product was  introduced  to the market  during the first
quarter of 1995.  The Company also sells parts and leases  cooling  towers.  The
Company has the ability to compete in the  conventional  cooling tower business,
but  intends to focus on  producing  and selling  modular  cooling  towers.  The
Company will continue to  construct,  repair and maintain  conventional  cooling
towers if sufficient margins exist on a particular project.



                                       10


<PAGE>


       The Company derives revenue from the following  principal  sources:  TTMT
Series  cooling  tower sales;  concrete  cooling  tower  construction  projects;
modular cooling tower leases;  other tower revenue consisting of parts sales and
service and  conventional  cooling tower projects;  and other operating  revenue
consisting of licensing  fees and payments paid to the Company for the licensing
of its technology to others.  TTMT Series cooling towers are typically sold on a
bid basis and  revenue  is  generally  recognized  when  towers  are  shipped to
customers.  Concrete  cooling tower projects are typically done 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 technology transfer fee and
technology materials are delivered to the licensee.

Results of Operations

        Twelve Months Ended November 30, 1996 Compared to Twelve Months
        ---------------------------------------------------------------
                             Ended November 30, 1995
                             -----------------------


       For the twelve  months  ended  November 30,  1996,  total tower  revenues
increased to $17,796,544 from $9,770,894 for the comparable  period in the prior
year. During the current twelve month period, 60 percent of total tower revenues
was derived from sales of 288 modular  fiberglass  cooling towers, 30 percent of
total tower revenues was derived from design and construction of the new modular
concrete  cooling  towers,  4 percent of total tower  revenues  was derived from
rental of  modular  fiberglass  cooling  towers,  and 6 percent  of total  tower
revenues was derived from other tower revenue.  In the  comparable  twelve month
period in 1995, 75 percent of total tower revenues was derived from sales of 210
modular  cooling  towers,  10 percent of total tower  revenues  was derived from
design and construction of modular  concrete  towers,  12 percent of total tower
revenues was derived  from rental of modular  cooling  towers,  and 3 percent of
total tower revenues were derived from other tower revenue. Other tower revenues
consist  primarily  of modular  tower parts sales and  service.  The increase in
fiberglass  tower  revenues  for  1996 is due not  only to the  increase  in the
quantity  of  units  sold but also due to the  sales of  larger  capacity,  more
expensive  units.  The increase in concrete tower sales reflects the success the
Company has had  marketing  this  product  since its  introduction  in the first
quarter of 1995.  Other  operating  revenue for the twelve months ended November
30, 1996,  consists of technology  transfer fees of $839,983 which were realized
as a result of international license agreements.  These technology transfer fees
demonstrate  the Company's  ability to capitalize on the technology it develops.
The Company is in the business of  developing  technology  for the cooling tower
industry  and  marketing  that  technology,  either  directly  or in the form of
products such as its TTMT Series cooling tower.

       The Company's cost of goods sold and constructed  during the twelve month
period  ended  November 30, 1996 was  $14,740,210,  or 83 percent of total tower
revenues, as compared to $8,963,375, or 92 percent, during the comparable period
in 1995.  The  increase  in cost of goods  sold and  constructed  resulted  from
increased  production  and sales of both the  modular  fiberglass  and  concrete
cooling towers.  The Company  continues to see  improvements in gross margins in
the fiberglass  line as that product line matures.  In the concrete line,  gross
margins  are less than  anticipated  because of the recent  introduction  of the
product.  Gross  margins in the  fourth  quarter  were lower than gross  margins
enjoyed during the third quarter,  primarily because of favorable contract terms
on certain jobs completed during the third quarter and  unexpectedly  high costs
recognized on projects completed during the fourth quarter. Management continues
to believe  that gross  margins  on  concrete  projects  will  improve  and will
eventually be consistent  with gross margins  realized on the  fiberglass  line.
Included in the cost of goods sold for the twelve month  period  ended  November
30,  1996,  is $358,016 to retrofit and service  towers  previously  sold.  This
compares to retrofit and warranty costs of $779,000 during the fiscal year ended
November  30, 1995.  In 1995,  design  changes were made and a complete  quality
control system was implemented which management believes will continue to reduce
such expenditures in future periods.




                                       11


<PAGE>


       The twelve month period  ended  November 30, 1996  reflected a 17 percent
increase in general  and  administrative  expenses  from  $1,321,195  in 1995 to
$1,543,530  in 1996.  The increase is due mainly to the addition of office staff
and related expenses. Selling expenses increased from $659,916 to $1,009,499 due
to  increased  sales  and  marketing  efforts  for both the  fiberglass  and the
concrete  modular  cooling  towers.  The  increase  over  1995 is due  mainly to
increased  salaries  expense  related to the increase in the sales and marketing
staff.  Increases  were also  incurred  in travel and related  expenses,  due to
increased participation at national and international trade shows, international
joint venture and license agreements, direct customer calls and presentations to
engineering  firms across the United  States.  Increases  were also  incurred in
postage costs related to increased  telemarketing  efforts and advertising costs
related  to  increased  direct  advertising  in trade  journals  and  magazines.
Management  expects  the  increased  investment  in selling  expenses  to have a
continued   positive  impact  on  revenues  in  future  periods.   Research  and
development  expenses  increased  from $108,183 in 1995 to $386,474 in 1996, due
mainly to expenditures on the new modular concrete tower development, and due to
development of the new water collection system. Management does not believe that
the Company will incur significant additional expenses on development of the new
modular concrete tower. However,  management does expect to continue to research
refinements in cooling tower design and  construction,  although the Company has
no fixed research and development budget.

       The Company's income from operations for the twelve months ended November
30, 1996 was $956,814, as compared to loss from operations of $1,281,775 for the
comparable  period in the prior year. After interest  expense and  miscellaneous
items,  the Company's  net income was $565,118  compared to a loss of $1,607,872
for the twelve months ended November 30, 1995. The increase in the Company's net
income  reflects  the  Company's  success in  developing  and  marketing  of its
technology and products both nationally and internationally.

       At January 31, 1997, the Company's  estimated backlog was over $6,000,000
including  three  contracts for the modular  concrete  cooling  towers  totaling
$1,784,000.  Two concrete  tower  contracts are scheduled for  completion in the
second  quarter of 1997 and the remaining  contract is projected to be completed
in the  fourth  quarter of 1997.  Interest  in this  product  has  continued  to
increase dramatically in both the United States and internationally. Essentially
all of the  estimated  backlog  for the  modular  fiberglass  cooling  towers is
scheduled for delivery in the first half of fiscal year 1997.

Liquidity and Capital Resources

       At November 30, 1996, the Company had working  capital of $3,147,126,  as
compared  to a working  capital  deficit  of  $618,610  at  November  30,  1995.
Improvement in the Company's  liquidity during the year resulted from profitable
operations and financing  activities  including the issuance of common stock and
the exercise of warrants and options.  The  Company's  cash flow provided by and
used in its operating,  investing and financing  activities  during fiscal years
1996 and 1995 are as follows:
<TABLE>
<CAPTION>
                                    1996                               1995
                                    ----                               ----
<S>                              <C>                               <C>
Operating activties              ($3,525,523)                      ($567,607)
Investing                        ($5,439,692)                      ($820,171)
Financing                        $9,177,287                       $1,867,879
</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  1997,  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. Similarly, management 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,  1996,  net costs in excess  of  billing  and
estimated  earnings on  uncompleted  contracts  were $471,716 as compared to net
billings  in excess of costs and  estimated  earnings  on  uncompleted  concrete
construction  projects  of $539,775 at November  30,  1995.  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.
                                       12
<PAGE>

       Scheduled  principal  payments on capital leases will total $111,934 over
the next twelve  months.  In addition,  $2,919,113  of the  Company's  debt will
become due and payable during the next twelve months.

       Substantially  all of the Company's planned capital  expenditures  during
the  next  six to  eight  months  will  be  related  to the new  facility  being
constructed by the Company in south Oklahoma City. The manufacturing facility is
approximately  30 percent  complete and is expected to be completed in May 1997.
Construction  of the office  facility is expected to begin in March or April and
be completed in July or August 1997.  Management  estimates  that the  Company's
total  investment in the project will be approximately  $7.5 million,  including
$1.5 million to equip the facility. Of the total capital required for the plant,
approximately $4.4 million was derived from a loan from the Oklahoma  Industries
Authority  (OIA),  and $1.8 million was derived from a loan from Boatman's Bank,
and  approximately  $1.5  million is expected to be derived from loans for plant
equipment.  The industrial revenue bonds were issued by the OIA in October 1996.
The bonds pay  interest  only for the first  twelve  months  out of an  interest
reserve  fund of  $238,000  set aside  from the bond  proceeds.  After the first
twelve months, the bonds are payable in quarterly  installments of principal and
interest in the amount of $157,000.  A debt service reserve fund of $157,000 was
also set aside from the bond proceeds.  The balance of the bond  proceeds,  less
issuance  costs,  are available to fund  construction  of the facility.  The OIA
holds a mortgage on the facility to secure payment of the bond indebtedness. The
Boatman's Bank loan was intended to provide $1.8 million of temporary  financing
for the project.  Accordingly,  the Company intends to obtain permanent  funding
for this amount and is  evaluating  alternative  sources of capital.  Management
expects  that some or all of the required  capital will be obtained  through the
sale of equity.  At this time, the Company has not identified a specific  source
of additional capital.

       The  Company  has  secured  loans  with  noncommercial  lenders  totaling
$3,600,000  to finance  its  working  capital  needs,  of which  $3,600,000  was
outstanding  at November  30,  1996.  Interest  rates and  payment  terms are as
follows:



<PAGE>
<TABLE>
<CAPTION>
  
           Loan             Interest          Interest              Maturity
          Amount              Rate             Payable                Date
      ----------------     ------------     --------------       --------------
          <C>                 <C>            <C>                    <C>
           $2,000,000          13%            Quarterly             5/31/98
           $1,000,000        11.25%           Quarterly              5/8/99
          $   500,000        11.25%           Quarterly              5/8/97
          $   100,000          15%            Quarterly              5/2/97
</TABLE>


       Management  also has  secured a line of credit at  Chickasha  Bank in the
amount of  $500,000  for  short  term cash flow  needs,  of which  $500,000  was
outstanding  at November  30, 1996.  This line of credit  bears  interest at the
bank's base floating rate, which was 10% at November 30, 1996. The principal and
interest are due April 13, 1997. In December 1995, the Company secured financing
in the amount of $294,505 to acquire  extrusion  equipment  to produce the water
collection   system  for  the  cooling  towers.   Previously  these  parts  were
out-sourced. However, to insure quality and an uninterrupted supply, the Company
made the decision to bring this  manufacturing  process  in-house.  This note is
payable monthly and matures in January 2000. In August 1996, the Company secured
a real estate  mortgage in the amount of $387,500 to finance the  acquisition of
the  property  in south  Oklahoma  City which will be the site for the new plant
expansion. Principal and interest at 3.5% is due August 1, 1997 and will be paid
with proceeds from the OIA loan. In September  1996, the Company  secured a line
of credit at Boatmen's Bank in the amount of $3,800,000, of which $1,325,000 was
outstanding  at November 30, 1996. Of the credit  facility,  $2,000,000 is to be
used for general  working  capital  needs,  $1,500,000  will be used to fund the
Company's  commitment to the expansion in south  Oklahoma  City, and $300,000 is
earmarked for down payments on equipment to be acquired in conjunction  with the
plant and office  expansion.  Interest on this line of credit is due monthly and
the  principal is due September 1, 1997.  In April 1995,  the Company  secured a
real estate  mortgage in the amount of  $116,000 to finance the  acquisition  of
property adjacent to its existing facilities to be used as offices.


                                       13


<PAGE>


Principal  and  interest on this  mortgage is due in monthly  payments of $1,555
with the  remaining  principal  and interest due April 15, 1998.  This  mortgage
bears  interest  at the  bank's  base  floating  rate,  which was 10  percent at
November 30, 1996. In October 1995, the Company  obtained  another mortgage loan
in the amount of $83,723 secured by real estate.  The loan bears interest at the
bank's floating rate,  which was 10 percent at November 30, 1996, and is payable
semi-annually,  and matures on October  12,  1998.  In April  1996,  the Company
secured an $1,200,000  credit  arrangement with one of its major vendors to fund
materials  purchased  from the vendor of which $619,000 was included in accounts
payable at November 30, 1996.

       During 1996, the Company  issued common stock and received  aggregate net
proceeds of  approximately  $4 million.  The  Company  used the net  proceeds to
purchase and redeem preferred  stock, to pay dividends  accrued on the preferred
stock, to retire debt and to fund its working capital requirements.

       The Company  believes it has  sufficient  capital  resources  to fund its
ordinary capital  requirements  for at least the next four quarters,  other than
debt which will mature  during the next twelve  months.  Management  anticipates
that the Company will be able to renew or replace its debt  obligations  as they
mature.  Specifically,  management  expects that the Boatmen's  facility will be
replaced  via  the  sale  of  common  stock  or  other  debt/equity  placements.
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.

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.

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)).


                                       14


<PAGE>


         The Company  engaged  Coopers & Lybrand L.L.P.  as its new  independent
accountants  effective  as of July 1, 1996.  During the two most  recent  fiscal
years and through  July 1, 1996,  the Company has 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.













































                                       15



<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, 1997.


















































                                       16


<PAGE>



                                     PART IV


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

       (a)        The following exhibits have been filed as part of this report:

                  Exhibit No.             Description
                  -----------             -----------
                  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                     Omitted

                   4.2                     Omitted

                   4.3-1                   Form of Stock Certificate

                   4.4-1                   Form of Underwriters' Warrants

                   4.5                     Omitted

                   4.6                     Omitted

                   4.7                     Omitted

                   4.8                     Omitted

                   4.9                     Omitted

                   4.10-6                  Registration Rights Agreement, 
                                           dated February 2, 1996, among
                                           Tower Tech, Inc., Lancer LP, 
                                           Michael  Taglich, and Robert Taglich.

                    10.18                  Promissory  Note  between Tower Tech,
                                           Inc., and Campbell, Hurley, Campbel
                                           and Campbell, dated August 1, 1996.

                    10.24                  Loan Agreement between Tower Tech,
                                           Inc. and Chickasha Bank & Trust Co.,
                                           dated March 23, 1995

                    10.38                  Promissory Note between Tower Tech, 
                                           Inc., and Boatmen's Bank, dated 
                                           September 26, 1996.

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

                                       17



<PAGE>


                     10.5                   Omitted
           
                     10.6                   Omitted

                     10.7                   Omitted

                     10.8-1                 Executive Employment Agreement
                                            between  Harold  Curtis and
                                            Tower Tech, Inc.,dated September 1,
                                            1993

                     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

                       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

                       10.17-7               1993 Stock Option Plan, as amended

                       10.18-1               Form of Distributorship Agreement

                       10.19                 Omitted

                       10.20                 Omitted

                       10.21                 Omitted



<PAGE>


                        10.22                 Omitted


                        10.23-2               Promissory  Note  between Tower
                                              Tech, Inc. and Electrical
                                              Constructors, Inc., dated April
                                              15, 1994

                        10.24-2               Warrant Certificate, dated July
                                              27,  1994,  between  Electrical
                                              Constructors  and  Tower  Tech,
                                              Inc.,    entitling   Electrical
                                              Constructors to purchase 50,000
                                              shares  of Tower  Tech,  Inc.'s
                                              common stock, $.001 par value..
                                                      
                       10.25-2                Note  between Tower Tech, Inc.,
                                              as Maker, and Electrical
                                              Constructors, as Payee, dated
                                              July 27, 1994

                       10.26-2                Warrant Certificate, dated 
                                              August 18, 1994, between J.
                                              David Bronstad and Tower Tech,
                                              Inc., entitling J. David
                                              Bronstad to purchase 100,000
                                              shares of Tower Tech, Inc.'s 
                                              common stock, $.001 par value

                       10.27-3                Security Agreement between 
                                              Tower Tech, Inc. and J. David
                                              Bronstad dated August 18, 1994

                        10.28                 Omitted

                        10.29-4               Promissory Note between Tower
                                              Tech, Inc. and Chickasha Bank 
                                              & Trust Co., dated April 10,
                                              1995

                         10.30                Omitted

                         10.31-5              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

                         10.32-5              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

                         10.33-5              Security Agreement between
                                              Tower Tech, Inc. and J. David
                                              Bronstad dated April 25, 1995

                         10.3-5               Security Agreement between
                                              Tower  Tech, Inc. and James
                                              McDonald dated April 25, 1995

                         10.35-5              Promissory Note between Tower
                                              Tech, Inc. and Chickasha Bank
                                              & Trust Co., dated March 3,
                                              1995

                         10.36-5              Promissory Note between Tower
                                              Tech, Inc. and James McDonald,
                                              dated May 2, 1995

                         10.37-5              Promissory Note between Tower
                                              Tech, Inc. and J. David
                                              Bronstad, dated May 2, 1995

                         10.38-5              Promissory Note between Tower
                                              Tech, Inc., and J. David
                                              Bronstad, dated June 14, 1995

                         10.39-5              Promissory Note between Tower
                                              Tech, Inc., and J. David
                                              Bronstad, dated June 27, 1995

                         10.40-5              Promissory  Note between Tower
                                              Tech, Inc., and Electrical
                                              Constructors, dated September
                                              12, 1995.


                          10.41-6             Promissory Note between Towe
                                              Tech, Inc., and Chickasha
                                              Bank. & Trust dated October 13,
                                              1995.

                                       19

<PAGE>




                         16.1-9               Letter on changes in certifying
                                              accountant

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

                         23.2                 Consent of Price Waterhouse 
                                              LLP


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, 1994.

 3   Incorporated  by reference from the same numbered  exhibit to Form 10-KSB
     for the year ended November 30, 1994.

 4   Incorporated by reference from the same numbered  exhibit to Form 10-QSB
     for the quarter ended May 31, 1995.

 5   Incorporated  by reference from the same numbered  exhibit to Form 10-QSB
     for the quarter ended August 31, 1995.

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

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

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

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

          (b)  The  Company  did not file any  reports  on Form 8-K  during  the
               quarter ended November 30, 1996.

















                                       20


<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
 -------------
 Harold Curtis       Chief  Executive  Officer/  Director     February 28, 1997
                     (Principal Executive Officer)


CHARLES D. WHITSITT
-------------------
Charles D. Whitsitt   Chief Financial Officer                 February 28, 1997
                     (Principal   Financial  Officer  and
                      Principal Accounting Officer)


LINCOLN E. WHITAKER
-------------------
Lincoln E. Whitaker   Director                               February 28, 1997


RANDAL K. OBERLAG
-----------------
Randal K. Oberlag     Director                               February 28, 1997

LEON POAG
---------
Leon Poag             Director                               February 28, 1997
















                                       21


<PAGE>



                          INDEX TO FINANCIAL STATEMENTS

                                                                       PAGE

Reports of Independent Accountants.......................................F-2

Balance Sheet as of November 30, 1996 and 1995 ......................... F-4

Statement of Operations for the years ended November 30, 1996
     and November 30, 1995.............................................. F-5

Statement of Stockholders' Equity for the years ended November 30, 1996
     and November 30, 1995 ............................................  F-6

Statement of Cash Flows for the years ended November 30, 1996
      and November 30, 1995 ............................................ F-7

Notes to Financial Statements .......................................... F-9




































                                       F-1


<PAGE>






                        Report Of Independent Accountants


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


We have  audited  the  accompanying  balance  sheet of  Tower  Tech,  Inc.  (the
"Company")  as of November 30, 1996 and the related  statements  of  operations,
stockholders'  equity and cash flows for the year 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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit 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 audit provides 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,
1996 and the  results  of its  operations  and its cash  flows for the year then
ended in conformity with generally accepted accounting principles.




                                                     COOPERS & LYBRAND L.L.P.


Oklahoma City, Oklahoma
February 12, 1997










                                       F-2



<PAGE>






                        Report Of Independent Accountants


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


In our opinion,  the  accompanying  balance sheet and the related  statements of
operations,  of  stockholders'  equity and of cash flows present fairly,  in all
material  respects,  the financial  position of Tower Tech, Inc. at November 30,
1995,  and the  results of its  operations  and its cash flows for the year then
ended  in  conformity  with  generally  accepted  accounting  principles.  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  audit.  We  conducted  our audit of these  statements  in  accordance  with
generally accepted auditing standards which require that we plan and perform the
audit 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,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audit  provides a reasonable  basis for the opinion  expressed
above.





PRICE WATERHOUSE LLP


Oklahoma City, Oklahoma
February 6, 1996














                                       F-3


<PAGE>



Tower Tech, Inc.
Balance Sheet

                                                            November 30,
<TABLE>
<CAPTION>
                                                        1996           1995
                                                        ----           ----
<S>                                                   <C>           <C>  
Assets
Current assets:
    Cash ......................................       $850,332        $638,260
    Accounts receivable, net of allowances of
      $22,645 and $10,645, respectively........      5,026,698       2,097,558
    Receivables from officers and employees ...         48,867          62,339
    Costs in excess of billings and estimated
      earnings on uncompleted contracts .......        471,716            --
    Inventory .................................       2,919,26       2,103,085
    Restricted assets - current ...............        373,532            --
    Prepaid expenses ..........................         28,454          88,359
                                                        ------           -----
       Total current assets ...................      9,718,863       4,989,601

Property, plant and equipment, net ............      3,774,209       2,318,383
Rental fleet, net .............................        837,491         500,525
Restricted assets - long-term .................      3,572,616            --
Patents, net ..................................        158,759          44,081
Other assets ..................................        248,398           8,687
                                                        ------           -----

          Total assets ........................     $18,310,33      $7,861,277
                                                        ======           =====

Liabilities and Stockholders' Equity
Current liabilities:
    Current maturities of long-term debt ......    $2,919,113       $1,710,560
    Current portion of obligations under 
     capital lease ............................       111,934           48,852
    Accounts payable ..........................     2,554,742        2,559,640
    Accrued liabilities .......................       802,469          532,093
    Billings in excess of costs and estimated
      earnings on uncompleted contracts .......         --             539,775
    Interest payable ..........................        54,365          115,572
    Dividends payable .........................         --             101,719
    Customer deposits .........................       129,114           --
                                                       ------            -----

       Total current liabilities ..............     6,571,737        5,608,211
                                                       ------            -----

Long-term debt, net of current maturities .....      7,522,100       1,193,784
                                                        ------           -----

Obligations under capital lease, net of current
      maturities...............................        259,271          99,637
                                                        ------           -----

Contingencies and Commitments (Note 12) .......           --              --
                                                        ------           -----

Stockholders' equity:
Preferred stock, $.001 par value; 2,000,000
     shares  authorized; 0 and 315,667 shares
     issued & outstanding at November 30,
     1996 and 1995, respectively ...............          --              316
Common stock, $.001 par value; 10,000,000
     shares authorized; 3,370,368 and
     2,428,572 shares issued and outstanding at
     November 30, 1996 and 1995, respectively ..         3,371           2,429
Capital in excess of par ......................      7,187,948       4,756,109
Accumulated deficit ...........................     (3,234,091)     (3,799,209)
                                                        ------           -----

       Total stockholders' equity .............       3,957,228        959,645
                                                         ------          -----

       Total liabilities and stockholders' equity   $18,310,336     $7,861,277
                                                         ======          =====
</TABLE>


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


                                       F-4


<PAGE>


Tower Tech, Inc.
Statement of Operations
<TABLE>
<CAPTION>
                                                         Year Ended
                                                         November 30,
                                                     1996            1995
                                                     ----            ----
<S>                                               <C>               <C>                                                 
Assets
Revenues:
    Tower sales ...............................    $10,628,983      $7,329,600
    Concrete tower construction ...............      5,355,931         975,754
    Tower rentals .............................        670,055       1,138,644
    Other tower revenue .......................      1,141,575         326,896
                                                        ------           -----

           Total tower revenue ................      17,796,544      9,770,894

    Other operating revenue ...................         839,983           --
                                                         ------          -----

           Total revenues .....................      18,636,527      9,770,894
                                                         ------          -----

Costs and expenses:
Cost of goods sold and constructed ............       14,740,210     8,963,375
    General and administrative ................        1,543,530     1,321,195
    Selling expenses ..........................        1,009,499       659,916
    Research and development ..................          386,474       108,183
                                                          ------         -----

           Total costs and expenses ...........       17,679,713    11,052,669
                                                          ------         -----

           Income (loss) from operations ......          956,814    (1,281,775)
                                                          ------         -----

Other income (expense):
    Interest ..................................         (465,776)     (369,432)
    Miscellaneous .............................           76,477        39,385
    Gain (loss) on sale of assets .............           (2,397)        3,950
                                                          ------         -----

           Total other income (expense) .......         (391,696)     (326,097)
                                                          ------         -----

Income (loss) before income taxes .............          565,118    (1,607,872)

Income taxes ..................................             --              --
                                                          ------         -----

Net income (loss) .............................          565,118    (1,607,872)

Dividends on preferred shares .................          (62,812)     (164,390)
                                                         ------          -----

Net income (loss) applicable to common shares .         $502,306   $(1,772,262)
                                                          ======         =====

Weighted average shares outstanding - primary .        3,281,291     2,428,572
                                                          ======         =====

Net income (loss) per common share - primary ..           $ 0.15        $(0.73)
                                                          ======         =====

Weighted average shares outstanding - fully diluted    3,368,057      2,428,572
                                                          ======          =====

Net income (loss) per common share - fully diluted        $ 0.15        $(0.73)
                                                          ======          =====


</TABLE>



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


                                       F-5


<PAGE>


Tower Tech, Inc.
Statement of Stockholders' Equity
<TABLE>
<CAPTION>

                                                            Year Ended
                                                            November 30,
                                                        1996           1995     
                                                        ----           ----     
                                                                    
<S>                                                    <C>             <C>
Preferred stock
Balance at beginning of period ................        $  316           $ 100
 Issuance of preferred stock - Series B ....              --               35
 Issuance of preferred stock - Series C ....              --              131
 Retirement of preferred stock - Series A ..              --             (100)
 Issuance of preferred stock - Series D ....              --              150
 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 ......................           --               316
                                                          ------         -----

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

Balance at end of period ......................           3,371          2,429
                                                          -----          -----

Capital in excess of par
Balance at beginning of period ................        4,756,109      3,580,715
    Proceeds from issuance of common stock ....        3,404,350            --
    Issuance of preferred stock Series B, C, and D          --        1,339,784
    Preferred dividends .......................          (62,812)      (164,390)
    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 ..........           609,127          --
                                                           ------        -----

Balance at end of period ......................         7,187,948     4,756,109
                                                           ------         -----

Accumulated deficit
Balance at beginning of period ...............         (3,799,209    (2,191,337)
    Net  income (loss) ........................           565        (1,607,872)
                                                           ------         -----

Balance at end of period ......................         (3,234,091)  (3,799,209)
                                                            ------        -----

Total stockholders' equity ....................         $3,957,228     $959,645
                                                            ======        =====



</TABLE>




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


                                       F-6


<PAGE>


Tower Tech, Inc.
Statement of Cash Flows
<TABLE>
<CAPTION>

                                                                                        Year Ended
                                                         November 30,
                                                   1996                1995
                                                   ----                ----
<S>                                          <C>                  <C>        
Cash flows from operating activities:
   Net income (loss)                         $     565,118        $ (1,607,872)
   Adjustments to reconcile net income 
     (loss) to net cash used in operating 
     activities:
      Depreciation and amortization                 419,085            316,239
      Loss (gain) on disposal of equipment            2,397             (3,200)
      (Increase) decrease in accounts
      receivable                                 (2,929,140)            179,244
      Decrease (increase) in receivables
        from officers & employees                    13,472             (53,928)
      Increase in inventory                        (816,179)           (433,237)
      Decrease (increase) in prepaid expenses        59,905             (38,497)
      Increase in other assets                      (60,356)             (6,022)
      (Decrease) increase in accounts payable        (4,898)            306,703
      Increase in accrued liabilities and interest
        payable                                     209,169             417,832
      Increase (decrease) in customer deposits      129,114            (184,644)
      (Decrease) increase in billings in excess
        of cost                                  (1,011,491)            539,775
                                                ------------         -----------

Net cash used in operating activities            (3,423,804)           (567,607)
                                               ------------          -----------

Cash flows from investing activities:
   Purchases of property and equipment             (979,609)           (472,251)
   Additions to rental fleet                       (413,173)           (308,951)
   Proceeds from sale of assets                      21,426               3,200
   Increase in patent costs                        (122,188)            (42,169)
   Purchase of restricted assets                 (3,946,148)               -
                                                -----------          -----------

Net cash used in investing activities            (5,439,692)           (820,171)
                                               ------------          -----------

Cash flows from financing activities:
   Proceeds from borrowings                       13,080,026          4,462,968
   Repayments of notes payable - stockholder           -                (42,742)
   Repayments of long-term debt and capital
      lease obligations                           (6,155,851)        (2,967,347)
   Redemption of preferred stock                  (1,500,000)               -
   Proceeds from issuance of preferred stock           -                490,000
   Proceeds from common stock issuances            3,386,059                -
   Proceeds from exercise of options and warrants    609,220                -
   Payment of preferred dividends                   (164,531)           (75,000)
   Payment of bond closing costs                    (179,355)               -
                                                ------------        ------------

Net cash provided by financing activities          9,075,568          1,867,879
                                                 ------------       ------------

Net increase in cash                                 212,072            480,101

Cash at beginning of year                            638,260            158,159
                                                -------------        -----------

Cash at end of year                             $    850,332       $    638,260
                                                 ============       ============


</TABLE>


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


                                       F-7


<PAGE>


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



                Supplemental Disclosure of Cash Flow Information


     Cash  paid for  interest  during  the years  ended  November  30,  1996 and
November 30, 1995 was $512,195 and $281,065, respectively.

      Supplemental Schedule of Non-Cash Investing and Financing Activities

     The Company  acquired certain  property,  plant and equipment under capital
lease  obligations  of $447,911,  and $153,406 for the years ended  November 30,
1996 and 1995, respectively.

     The Company  acquired certain real estate during 1996 and 1995 by executing
notes payable in the aggregate amount of $387,500 and $218,723, respectively.

     The Company  converted a $350,000 note payable to it's C.E.O.  and his wife
to 35,000 shares of Series B preferred stock on May 15, 1995. See Note 10.

On November 30, 1995,  the Company  issued  150,000 shares of Series D preferred
stock in exchange  for a $500,000  note  payable and 100,000  shares of Series A
preferred stock. See Note 10.

See Note 10 for other non-cash issuances and conversions of preferred stock.





























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


                                       F-8


<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.

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.  Rental towers are  classified as rental
fleet and depreciated over their estimated useful life of five years.

Revenues from licensing  agreements are recognized  upon delivery of the related
technology materials and 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-9


<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.

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 the
Oklahoma Industries  Authority Revenue Bonds and the $3.8 million line of credit
with a bank.  See Note 6. The  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 sheet.

Income taxes

The Company has adopted  Statement of Financial  Accounting  Standards  No. 109,
"Accounting  for Income  Taxes"  (SFAS  109).  SFAS 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.

Research and development

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

Income (loss) per common share

Net income  (loss) 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-10


<PAGE>


Notes to Financial Statements, continued

1.     General and Summary of Significant Accounting Policies, continued


Fair value of financial instruments

The  Company's  financial   instruments  consist  primarily  of  cash  and  cash
equivalents, trade receivables, trade payables, 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,  trade  receivables  and trade
payables are 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 bank 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

The Company sells cooling  towers to customers  throughout  the U.S. The Company
extends credit based upon an evaluation of the customer's  financial  condition,
generally  without  requiring   collateral.   Exposure  to  losses  on  accounts
receivable is principally dependent on each customer's financial condition.  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 ("SFAS 123"),  "Accounting  for Stock Based  Compensation".  As permitted by
SFAS 123,  the  Company  plans to  continue  to  retain  its  current  method of
accounting for stock compensation costs and adopt the disclosure requirements of
this Statement in fiscal 1997.

2.     Inventories

Inventories consist of the following at November 30:
<TABLE>
<CAPTION>
                                       1996                           1995
                                  ----------------             -----------------
       <S>                          <C>                            <C>    

       Raw materials                 $ 2,317,411                    $ 1,404,635
       Work in process                   305,209                        211,216
       Finished goods                    296,644                        487,234
                                      ----------                   -----------

                                     $ 2,919,264                    $ 2,103,085
                                     ===========                    ===========
</TABLE>


3.     Restricted Assets

Restricted  assets  consist of  investments  held by trustee in connection  with
financing  obtained to fund  construction of the Company's new manufacturing and
office  facility.  See Note 4. 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, 1996, is set forth in the following table:







                                      F-11



<PAGE>


Notes to Financial Statements, continued

3.     Restricted Assets, continued


<TABLE>
<CAPTION>

                                                           1996
                                                           ----
                                               
       <S>                                               <C>   
       Under bond indenture agreements - 
          held by trustee:

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

       Total restricted assets                                3,946,148

       Amount required for current liabilities                 (373,532)

       Noncurrent restricted assets                          $ 3,572,616
                                                             ===========
</TABLE>


4.     Property, Plant and Equipment

Following is a summary of property, plant and equipment at November 30:
<TABLE>
<CAPTION>

                                            1996                     1995
                                     ------------------        -----------------
        <S>                              <C>                      <C>    

        Building and plant improvements    $1,782,561               $ 1,229,189
        Shop equipment                        452,191                   396,566
        Office furniture and equipment        197,669                   177,325
        Molds and dies                      1,117,156                   963,342
        Trucks and vehicles                     -                        35,537
        Assets under capital lease            660,612                   212,701
        Construction in progress              564,785                    19,862
        Capitalized interest                   27,932                       -
                                       --------------            ---------------
                                            4,802,906                 3,034,522

        Accumulated depreciation           (1,028,697)                 (716,139)
                                          -----------              -------------

                                          $ 3,774,209               $ 2,318,383
                                          ===========                ===========

</TABLE>

Construction in progress consists primarily of construction on the Company's new
manufacturing  and office  facility in south  Oklahoma City,  Oklahoma.  The new
facility has been financed  through an  industrial  revenue bond issuance by the
Oklahoma  Industries  Authority  in  the  amount  of  $4,405,000.  See  Note  6.
Management  estimates the Company's total investment in the new facility,  which
is  scheduled  for  completion  in 1997,  will be  approximately  $7.5  million,
including $1.5 million to equip the facility.

Depreciation of property, plant and equipment was $411,575 and $314,117, for the
years ended  November 30, 1996 and November  30,  1995,  respectively,  of which
$297,870 and $280,807 was included in costs of good sold and constructed.

5.    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:


                                      F-12


<PAGE>


Notes to Financial Statements, continued

5.     Rental Fleet, continued

<TABLE>
<CAPTION>

                                         1996                         1995
                                 --------------------          -----------------
         <S>                        <C>                          <C>   
         Rental fleet                $ 1,014,578                 $    612,195
         Accumulated depreciation       (177,087)                    (111,670)
                                    ------------                   ------------

                                    $    837,491                   $   500,525
                                    ============                    ===========


6.     Long-Term Debt

The following is a summary of long-term debt at November 30:

</TABLE>
<TABLE>
<CAPTION>

                                                    1996               1995
                                                    ----               ----
<S>                                                 <C>                <C>   
                                                   
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; secured
by the Company's right, title and interest in the
real estate comprising the Company's manufacturing
facility; bonds are eligible for 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; bonds are
eligible for early redemption subject to certain
restrictions.                                      $ 4,405,000   $       -

Line of credit  payable to an individual; credit
limit of $2,000,000; principal and interest due
May 31, 1998; interest rate at 13%; collateralized
by accounts receivable, inventory, equipment, and
personal guarantee of the Company's C.E.O. and
his wife.                                            2,000,000            -

Notes  payable to an  individual; principal
payments of $500,000 and $1,000,000 due on May 8,
1997 and 1999, respectively; variable interest
at bank prime + 3% (11.25% at  November  30, 
1996) collateralized by a first lien and right
of assignment on certain patents.                    1,500,000            -

Line of credit with a bank; credit limit of 
$3,800,000; principal and interest due January 31,
1997; (subsequently extended to September 1, 1997)
interest at 30 day LIBOR plus 1% (6.50% a  November
30, 1996); 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

Notes to Financial Statements, continued

6.     Long-Term Debt, continued


                                                        1996            1995
                                                        ----            ----
Note payable to a bank; principal and interest
due April 13, 1997; variable interest at bank
prime (10% at November 30, 1996);
collateralized by real estate.                        500,000          499,970

Note payable to a bank; 35 monthly payments
of principal and interest with remaining
principal due April 15, 1998; variable 
interest at bank prime (10% at November 30,
1996); collateralized by real estate.                 104,908          112,388


Note payable to an individual; principal due
May 2, 1997; 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         100,000


Note payable to a bank; semi-annual payments
of principal and interest with final payment
due October 13, 1998; variable interest at
bank prime (10% at November 30, 1996);
collateralized by real estate.                         75,973           83,723

Line of credit payable to an individual; credit
limit of $1,000,000; principal and interest due
August 18, 1996; interest at 15%; collateralized
by accounts receivable, inventory, equipment, 
and personal guarantee of the Company's C.E.O.
and his wife.                                              -         1,000,000

Notes payable to individuals; interest ranging from
10% - 15%; collateralized by common stock warrants, 
first lien and right of assignments on certain 
patents and by personal guarantee of the Company's
C.E.O. and his wife.                                        -          680,000

Line of credit payable to an individual; credit
limit of $400,000; principal due April 25, 1997;
interest due quarterly; collateralized by
accounts receivable, inventory, equipment, all
other chattels and patent rights, and personal
guarantee of the Company's C.E.O. and his wife.              -         400,000

Various notes payable to financial institutions;
principal and interest due monthly; collateralized
by vehicles and equipment.                             42,832           28,263
                                                  -------------    -------------
                                                    10,441,213        2,904,344

       Current portion                              (2,919,113)      (1,710,560)
                                                   ------------      -----------


       Long-term debt, net                         $ 7,522,100      $ 1,193,784
                                                    ===========      ===========

</TABLE>

                                      F-14
Notes to Financial Statements, continued

6.     Long-Term Debt, continued


Principal  amounts  maturing  on  long-term  debt for each year is as follows at
November 30, 1996:
<TABLE>
<CAPTION>

       <S>                                            <C>   

       1997                                           $ 2,919,113
       1998                                             2,473,101
       1999                                             1,339,677
       2000                                               359,322
       2001                                               375,000
       Thereafter                                       2,975,000
                                                       ------------

                                                       $10,441,213

</TABLE>

7.     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, 1996:
<TABLE>
<CAPTION>

       <C>                                <C>
       1997                                $ 151,135
       1998                                  145,780
       1999                                  136,571
       2000                                   19,102
                                          ----------

        Total minimum lease payments         452,588
        Amount representing interest         (81,383)
                                             ------- 

        Present value of net minimum
          lease payments                     371,205

        Current portion                     (111,934)
                                            -------- 

                                            $ 259,271
                                            =========
</TABLE>


8.     Income Taxes

Deferred  tax  liabilities  and  assets  at  November  30 are  comprised  of the
following:
<TABLE>
<CAPTION>

                                                       1996              1995
                                                       ----              ----
<S>                                                   <C>             <C>                                                 
Deferred tax liabilities:
         Depreciation .........................       $140,351         $51,191
                                                       ------           -----

       Deferred tax assets:
         Accounts receivable allowance ........          8,546           4,013
         Warranty reserve .....................         37,740          75,400
         Other ................................         22,158           6,813
         Net operating loss carryforward ......      1,242,608       1,374,416
                                                        ------           -----

       Total deferred tax assets ..............      1,311,052       1,460,642
       Valuation allowance for deferred tax assets  (1,170,701)     (1,409,451)
                                                        ------           -----

       Net deferred tax asset .................        140,351           51,191
                                                        ------            -----

                          Net deferred taxes ..             --              --
                                                     ----------       ----------
                                                     ----------       ----------
                                                      
</TABLE>
                                                  
                               F-15
Notes to Financial Statements, continued

8.     Income Taxes, continued


At November 30, 1996,  the Company had a net operating loss  carryforward  (NOL)
for regular tax purposes of approximately $3,300,000, expiring in 2009 to 2010.

SFAS 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. If
the Company achieves sufficient  profitability to utilize the NOL, the valuation
allowance will be reduced resulting in a reduction of future income tax expense.

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%.


9.     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 on the same
terms as other  domestic  sales  representatives.  During  1996  and  1995,  R&B
purchased $253,034 and $69,407,  respectively,  of products from the Company and
earned $32,343 and $15,911, 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 $549,549 during fiscal
year 1996.

The following represents the summarized financial data of TTSE:
<TABLE>
<CAPTION>


                                             November 30, 1996
                                             -----------------
        <S>                                      <C>                                 
        Balance sheet data
        Assets                                   $   520,114
        Liabilities                              $   452,773
        Equity                                   $    67,341

                                              For the period ended
                                                November 30, 1996
                                                -----------------
                                   

        Statement of operations data
        Sales                                     $   751,499
        Cost of Sales                                 611,625
        Other expenses                                152,532
                                                      -------

        Net Loss                                  $   (12,658)
                                                      =======



</TABLE>


                                      F-16
Notes to Financial Statements, continued


10.    Stockholders' Equity


At November 30, 1996, the Company had outstanding  warrants and options allowing
the holders to purchase a total of approximately 424,480 shares of the Company's
Common Stock at an average price of $5.91 per share expiring at various  periods
through July 2005.  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 11).  Warrants for
84,400 shares of common stock were exercised during 1996.

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 May 15, 1995, the Company issued 35,000 shares of newly  designated  Series B
Preferred Stock to Harold Curtis,  C.E.O. and his wife, in exchange for $350,000
of  indebtedness  owed to them.  The Series B  Preferred  Stock is  entitled  to
cumulative  quarterly  dividends  at the annual rate of $.75 per share and has a
liquidation  preference of $10 per share, plus accrued dividends.  Additionally,
each share of Series B Preferred Stock is convertible  into two shares of Common
Stock at the  option  of the  holder  and is  redeemable  at the  option  of the
Company,  at $10 per share. Each share of Series B Preferred Stock has the right
to vote based on the shares of Common  Stock  into which it is  convertible.  On
March 22, 1996, the Series B Preferred Stock was converted into 70,000 shares of
common stock.

On June 20, 1995, the Company issued 130,667 shares of newly designated Series C
Preferred  Stock in exchange for $490,000.  The Series C Preferred  Stock is not
entitled to quarterly  dividends and has a  liquidation  preference of $3.75 per
share. Additionally,  each share of Series C Preferred Stock is convertible into
one share of Common Stock.  Each share of Series C Preferred Stock has the right
to vote based on the shares of Common  Stock into which it is  convertible.  The
Series C Preferred  Stock was redeemed in exchange for Series E Preferred  Stock
in  December  1995.  The Series E  Preferred  Stock is  entitled  to  cumulative
dividends  at the annual  rate of $.46 per share,  or $60,000 in the  aggregate,
payable  monthly.  Each share of Series E Preferred  Stock may be converted into
one share of common  stock at the  election of the holder at any time after July
1, 1996. 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.

On November 30, 1995,  the Company  issued  150,000  shares of newly  designated
Series D Preferred Stock to an unrelated partnership in exchange for $500,000 of
indebtedness  owed to the  partnership  and redemption of the Series A Preferred
Stock.  The  Series  D  Preferred  Stock is  entitled  to  cumulative  quarterly
dividends at the annual rate of $1.50 per share and has a liquidation preference
of $10 per share, plus accrued dividends.  Additionally,  each share of Series D
Preferred Stock is convertible  into two shares of Common Stock at the option of
the holder and is  redeemable  at the option of the  Company,  at $10 per share.
Each share of Series D Preferred Stock has the right to vote based on the shares
of Common  Stock into which it is  convertible.  On March 22,  1996 the  Company
redeemed the 150,000 shares of Series D Preferred Stock for $10 per share.





                                      F-17


<PAGE>


Notes to Financial Statements, continued


11.    Stock Option Plan


In October 1996, 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.  Vested  options
may be exercised  after five years of  employment or upon  termination  from the
Company.  The following  represents  stock option activity for the periods ended
November 30, 1996 and 1995:
<TABLE>
<CAPTION>
                                             Number of       Option Prices
                                              Shares            Per Share
       
        <S>                                  <C>          <C>    
                                   
        Exercised during the year:
           1995
           1996                                 6,880      $        6.25
        Granted during 1995                    71,480      $        6.25
        Granted during 1996                    75,680      $ 6.25 - 7.38
        Cancellations during 1996              14,720      $        6.25
        Outstanding at November 30, 1995      156,800      $        6.25
        Outstanding at November 30, 1996      210,880      $ 6.25 - 7.38
</TABLE>


At November 30, 1996, no options were exercisable.

12.     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. In October 1996, the Company extended their secured credit agreement with
the vendor whereby the Company will be extended credit not to exceed  $1,200,000
for the purchase of components  ($619,000  outstanding  and included in accounts
payable at November 30,  1996).  The credit  agreement is for a term of 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. Payment terms require payment of all invoices within 30 days of
invoice date.

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).

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.  Included in cost of
goods sold and  constructed  for the years ended  November 30, 1996 and 1995 are
$358,016 and $779,000,  respectively,  of expense to retrofit and service towers
previously  sold.  The Company has recorded a liability for  estimated  warranty
costs of $100,000  and  $200,000 at  November  30, 1996 and 1995,  respectively.
Management  believes the warranty reserve is sufficient to cover future warranty
costs.

                                      F-18


<PAGE>


Notes to Financial Statements, continued

13.   Licensing Agreements


During 1996 and 1995, the Company entered into certain  license  agreements with
various  foreign  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 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, 1996 totaled $839,983. On certain
agreements,  the  Company  also  earns  continuing  royalties  for all  Licensed
Products promoted by the licensee.

The  agreements  with two foreign  cooling tower  companies  give the Company an
option to purchase  49% of a company set up to market  cooling  towers using the
TTMT  technology.  At November 30,  1996,  the Company has not  exercised  these
options.







































                                      F-19


<PAGE>


                               INDEX TO EXHIBITS


                                                                         PAGE
 10.4  Loan Agreement between Tower Tech, Inc., and Oklahoma Industries
          Authority, dated October 1, 1996 ............................  E-2
          
 23.1  Consent of Coopers & Lybrand L.L.P..............................  E-37

 23.2  Consent of Price Waterhouse LLP.................................  E-38
           











































                                       22


<PAGE>