U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
For the period ended February 28, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from . . . . . . . . . . . . .
Commission file number 1-12556
TOWER TECH, INC.
(Name of small business issuer in its charter)
Oklahoma 73-1210013
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
11935 South I-44 Service Road, Oklahoma City, Oklahoma 73173
(Address of principal executive offices) (Zip Code)
Issuer's telephone number 405/290-7788
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
(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 X No ___
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date.
Common Stock $.001 par value 3,526,311 shares as of April 14,1998
<PAGE>
INDEX
TOWER TECH, INC.
Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Balance Shee-February 28, 1998 F-1
Statement of Operation--Three months ended February 28, 1998
and 1997 F-2
Statement of Cash Flows-Three months ended February 28, 1998
and 1997 F-3
Notes to Financial Statements -- February 28, 1998 F-4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 3
Part II. Other Information
Item 6. Exhibits and Reports on Form 8K 8
Signatures 12
-2-
<PAGE>
TOWER TECH, INC.
BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
February 28, 1998
<S> <C>
Assets
Current assets:
Cash $ 176,885
Accounts receivable, net of allowance
for doubtful accounts of $172,645 5,448,856
Accounts receivable, affiliate 170,818
Notes receivable, current 201,357
Receivables from officers and employees 77,652
Cost and estimated earnings in excess of
billings on uncompleted contracts 1,063,546
Inventory 4,099,770
Restricted assets - current 158,406
Prepaid expenses 199,660
Deferred tax asset 67,147
--------------
Total current assets 11,664,097
Property, plant and equipment, net 12,097,717
Rental fleet, net 2,297,909
Patents, net 212,478
Deferred tax asset 776,096
Notes receivable, non-current, net of unamortized
discount of $54,546 724,330
Other assets 691,913
--------------
Total Assets $28,464,540
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $ 622,460
Current maturities of obligations under capital lease 152,461
Accounts payable 3,458,716
Accounts payable, affiliate 2,188
Billings and estimated earnings in excess of costs
on uncompleted projects 15,195
Accrued liabilities 868,983
Interest payable 172,431
Customer deposits 58,865
Income tax payable 5,101
----------------
Total current liabilities 5,356,400
Long-term debt, net 16,272,698
Obligations under capital lease 246,603
Stockholders' equity:
Common stock, $.001 par value; 10,000,000 shares
authorized; 3,526,311 shares issued and outstanding 3,527
Capital in excess of par 8,053,787
Deficit (1,468,475)
------------
Total stockholders' equity 6,588,839
Total liabilities and stockholders' equity $28,464,540
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-1
<PAGE>
TOWER TECH, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
Three Months Ended
February 28,
<CAPTION>
<S> <C> <C>
1998 1997
Sales and other operating revenue:
Tower sales $ 1,562,390 $ 4,566,931
Concrete tower construction 1,969,165 556,565
Tower rentals 475,681 59,444
Other tower revenue 43,354 203,167
------------- -------------
Total tower revenue 4,050,590 5,386,107
Other operating revenue - 270,000
------------------ ------------
Total revenues 4,050,590 5,656,107
----------- -----------
Costs and expenses:
Cost of goods sold and constructed 3,408,561 4,315,723
General and administrative 444,704 367,845
Selling expenses 425,465 281,756
Research and development 82,385 143,839
------------- ------------
Total cost and expenses 4,361,115 5,109,163
----------- -----------
(Loss) income from operations (310,525) 546,944
------------- ------------
Other income (expense):
Interest (212,424) (159,967)
Miscellaneous 27,391 18,531
------------- -------------
Total other income (expense) (185,033) (141,436)
------------- ------------
(Loss) income before income taxes (495,558) 405,508
Income tax benefit 198,223 -
------------ --------------
Net (loss) income $ (297,335) $ 405,508
=========== ===========
Weighted average shares outstanding - basic 3,526,311 3,370,368
=========== ===========
Net (loss) income per common share - basic $ (.08) $ 0.12
=========== ===========
Weighted average shares outstanding - diluted 3,526,311 3,566,078
========== ==========
Net (loss) income per common share - diluted $ (.08) $ 0.11
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
TOWER TECH, INC.
STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
February 28,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (297,335) $ 405,508
Adjustments to reconcile net (loss) income
to net cash used by operating activities:
Depreciation and amortization 153,889 128,714
Deferred tax benefit (198,223) -
Payment on notes receivable 7,267 -
Decrease (increase )in accounts receivable 283,443 (1,668,697)
Decrease in accounts receivable, affiliate 156,477 -
(Increase) decrease in cost in excess of
billings (344,099) 86,112
(Increase) decrease in inventory (1,072,114) 126,106
Increase in prepaid expenses (70,387) (78,459)
Decrease in other assets 24,345 8,857
Increase in accounts payable 1,197,488 499,825
Decrease in accounts payable, affiliate (8,389) -
Increase in billings in excess of costs 15,195 -
Increase (decrease )in interest payable and
accrued liabilities 121,835 (88,109)
Decrease in deposits (55,169) (129,114)
Decrease in income tax payable (24,000) -
------------- --------------
Net cash used in operating activities (109,777) (709,257)
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (2,210,292) (870,492)
Decrease in restricted assets 2,062 653,073
Additions to rental fleet (310,986) (42,502)
Purchase of patents (2,728) (17,718)
-------------- -------------
Net cash used in investing activities (2,521,944) (277,639)
----------- ------------
Cash flows from financing activities:
Proceeds from borrowings 5,003,324 1,000,000
Repayments of long-term debt
and capital lease obligations (2,552,673) (537,723)
Decrease in book overdraft (193,999) -
------------ --------------
Net cash provided by financing activities 2,256,652 462,277
----------- ------------
Net decrease in cash (375,069) (524,619)
Cash at beginning of period 551,954 850,332
------------ ------------
Cash at end of period $ 176,885 $ 325,713
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
TOWER TECH, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Interim Financial Statements
The balance sheet as of February 28, 1998, and the related statement of
operations for the three month period ended February 28, 1998 and 1997 and
the statement of cash flows for the three month period ended February 28,
1998 and 1997 are unaudited; in the opinion of management, all adjustments
necessary for a fair presentation of such financial statements have been
included.
These financial statements and notes are presented as permitted by Form
10-QSB and should be read in conjunction with the Company's financial
statements and notes included in the annual report on Form 10-KSB.
2. Recently Issued Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share
("FAS 128"). FAS 128 requires presentation of "basic" and "diluted"
earnings per share, as defined, on the face of the income statement for
all entities with complex capital structures. FAS 128 is effective for
financial statements issued for periods ending after December 15, 1997 and
requires restatement of all prior period earnings per share amounts. The
Company has adopted FAS 128 and has restated all prior periods. FAS 128
requires a reconciliation of the numerators and denominators of the basic
and diluted EPS computations. Options to purchase 210,894 shares of common
stock at a weighted average price of $6.67 were outstanding during the
three month period ended February 28, 1998 but were not included in the
computation of diluted EPS because the effect of these outstanding options
would be antidilutive. A reconciliation for the three months ended
February 28, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
Income Shares Per Share
(Numerator) (Denominator) Amount
-----------------------------------------
<S> <C> <C> <C>
For the period ended February 28, 1998
Basic EPS
Loss available to common stockholders ($297,335) 3,526,311 $(.08)
======
Effect of dilutive securities
Employee stock options and warrants - -
---------- ----------
Diluted EPS
Loss available to common stockholders and
assumed conversions ($297,335) 3,526,311 $(.08)
======== ========= ======
For the period ended February 28, 1997
Basic EPS
Income available to common stockholders $405,508 3,370,368 $.12
====
Effect of Dilutive Securities
Employee stock options and warrants - 195,710
---------- ---------
Diluted EPS
Income available to common stockholders
and assumed conversions $ 405,508 3,566,078 $.11
========= ========= ====
</TABLE>
F-4
<PAGE>
3. Debt
Effective December 31, 1997, the Company entered into a $3,500,000 line
of credit agreement with a financial institution for working capital
requirements and completion of the Company's manufacturing facility in Oklahoma
City. This financing replaced a $2,000,000 line of credit payable to an
individual. The outstanding balance at February 28, 1998 was $2,728,295.
Interest is payable monthly at a variable rate of two basis points over national
prime rate. The loan matures June 30, 1999. The agreement is collateralized by
certain accounts receivable, inventory, rental fleet and patents. The Company
has received a commitment to increase this line of credit to $5,000,000. Also,
negotiations are in process to further increase this line of credit to help fund
increases in the Company's rental fleet.
In March 1998, the Company entered into a note payable for $572,000.
Principal and interest payments of $8,206 are due monthly and matures December
2003. The note bears interest at 10%. The note is collateralized by certain
equipment.
F-5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Three Months Ended February 28, 1998 Compared to Three Months Ended
February 28, 1997
For the three months ended February 28, 1998, total tower revenues
decreased to $4,050,590 from $5,386,107 for the comparable period in the prior
year. During the current three month period, 39 percent of total tower revenues
was derived from sales of 41 modular fiberglass cooling towers, 48 percent of
total tower revenues was derived from construction of the modular concrete
tower, 12 percent of total tower revenues was derived from rental of modular
fiberglass cooling towers and 1 percent of total tower revenues was derived from
other revenues. In the comparable three month period of 1997, 85 percent of
total tower revenues was derived from sales of 107 modular fiberglass cooling
towers, 10 percent of total tower revenues was derived from construction of the
modular concrete tower, 1 percent of total tower revenues was derived from
rental of modular cooling towers, and 4 percent of total tower revenues was
derived from other tower revenues. Other tower revenues consist primarily of
sales of modular tower parts and service, accessory equipment, water treatment
equipment and water treatment chemicals. The decrease in fiberglass tower
revenues for 1998 is due not only to the decrease in the quantity of units sold
but also to the sales of smaller capacity, less expensive units. The decrease in
the number of units sold is due primarily to the delays in the completion and
occupancy of the Oklahoma City (OKC) plant combined with delays in the delivery
of the manufacturing equipment and tooling. It is estimated that these delays
will continue to have a negative impact on the second quarter 1998. However, the
Company has tried to minimize the impact by continuing to aggressively market
and sell its TTMT series modular fiberglass cooling tower which is continuing to
be assembled in its Chickasha, Oklahoma plant. The increase in concrete tower
revenues is due to the increase in the number and size of jobs completed and in
process. The increase in tower rentals is due to an increase in the number of
rental contracts as well as an increase in the contract amount. The Company has
been focusing on marketing this segment of the business and has increased the
number of units available for rental. Accordingly, steady growth in rental tower
revenues is anticipated. Other tower revenue is down from the previous year due
to the same reasons that tower sales decreased. No licensing agreements were
finalized in the first quarter of fiscal 1998 although negotiations are in
process for agreements in China and Northern Europe. Other operating revenues
for the three months ended February 28, 1997 includes technology transfer fees
which were realized as a result of a license agreement with Tecno Procesos
Industriales covering the Republic of Mexico.
The Company's cost of goods sold and constructed during the three-month
period ended February 28, 1998, was $3,408,561, or 84 percent of total tower
revenues, as compared to $4,315,723 or 80 percent of total tower revenues during
the comparable period in 1997. The decrease in cost of goods sold and
constructed during the first quarter of 1998 resulted from decreased production
and sales of the modular fiberglass cooling towers. Overall margin for the first
quarter 1998 decreased primarily as a result of lower fiberglass tower sales
which was partially offset by an increase in rental revenues, which is a higher
margin operation. Included in the cost of goods sold for the first quarter 1998
is $85,000 to retrofit and service towers previously sold. This compares to
expenditures of $144,000 during the comparable period in the prior year. In
1995, design changes were made and a complete quality control system was
implemented which management believes will continue to control such per unit
expenditures in future periods.
-3-
<PAGE>
The three month period ended February 28, 1998 reflected a 21 percent
increase in general and administrative expenses from $367,845 in 1997 to
$444,704. The increase is due mainly to the addition of office staff and related
expenses, and additional expenses related to the OKC facility. Selling expenses
increased from $281,756 to $425,465 due to increased sales and marketing efforts
for both the TTMT Series and the concrete modular cooling towers, including an
increase in sales staff and expenses related primarily to the opening of direct
international sales offices. Management expects the increased investment to have
a positive impact on revenues in future periods. Research and development
expenses decreased from $143,839 in the first quarter of 1997 to $82,385 in the
first quarter of 1998. Although the Company has no fixed research and
development budget, management does expect to continue to research refinements
in cooling tower design and construction.
The Company's loss from operations for the three months ended February
28, 1998 was $310,525 as compared to income of $546,944 for the comparable
period in the prior year. After interest expense, miscellaneous items, and
income tax benefit, the Company's net loss is $297,335 compared to net income of
$405,508 for the quarter ended February 28, 1997.
The Company recognized an income tax benefit of $198,223 for the three
months ended February 28, 1998, compared to no income tax benefit or expense for
the comparable period in 1997. FAS 109 requires that the Company record a
valuation allowance when it is more likely than not that some portion or all of
the deferred tax assets will not be realized. The ultimate realization of the
deferred income tax assets depends on the Company's ability to generate
sufficient taxable income in the future. Management has determined that, based
on the Company's ability to generate taxable income in two consecutive years
(1996 and 1997), it is more likely than not that the Company will realize the
deferred tax assets.
The Company's estimated backlog for the next three quarters of fiscal
year 1998 is over $15.5 million including a total of six contracts for the TTCT
Series concrete cooling towers and/or parts totaling $4.2 million, four
contracts are scheduled for completion in the second quarter of 1998 and the
remaining contracts are projected to be completed in the last half of 1998.
Interest in this product has continued to increase in both the United States and
international markets. The estimated backlog for the TTMT Series fiberglass
cooling towers is $7.3 million. Actual deliveries of the TTMT Series towers and
the timing of these deliveries, is dependent upon when the OKC plant is fully
operational . The Company expects to begin full production in May 1998. Rental
tower backlog is over $4.0 million with $.8 million scheduled for second quarter
1998 and the balance scheduled for the last half of 1998.
Liquidity and Capital Resources
At February 28, 1998, the Company had working capital of $6,307,697 as
compared to working capital of $6,904,910 at November 30, 1997. The Company's
cash flow provided by (used in) its operating, investing and financing
activities during first quarter 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Operating activities ($109,777) ($709,257)
Investing activities ($2,521,944) ($277,639)
Financing activities $2,256,652 $462,277
</TABLE>
-4-
<PAGE>
The Company's capital requirements for its continuing operations consist
of its general working capital needs, scheduled payments on its debt obligations
and capital expenditures. Management anticipates that the Company's operating
activities will require cash during 1998, which primarily relates to the
anticipated growth in receivables and inventory levels to support expanding
sales. The Company tries to minimize its inventory of component parts, although
minimum order requirements of some suppliers can cause inventory levels to
fluctuate significantly from period to period. Bringing the manufacturing
processes in-house will enable the Company to better manage inventory levels and
reduce costs when the new manufacturing facility is fully operational. However,
fluctuations in inventory levels are still expected due to the size of planned
production runs of components. Management also attempts to manage accounts
receivable to increase cash flow, but it is anticipated that accounts receivable
will increase as sales increase. Other significant variances in working capital
items can also be expected. Also, the Company's concrete construction projects
will have a greater effect on working capital requirements in the future. At
February 28, 1998, net costs in excess of billing and estimated earnings on
uncompleted contracts were $1,063,546 as compared to net costs in excess of
billings and estimated earnings on uncompleted contracts of $385,604 at February
28, 1997. Normally, concrete construction projects provide for progress payments
of the contract price with a retainage of 10 to 15 percent payable after
completion of the project.
Scheduled principal payments on capital leases will total $152,461 over
the next twelve months. In addition, $622,460 of principal payments will become
due on the Company's debt during the next twelve months.
Substantially all of the Company's planned capital expenditures during
1998 will be related to the completion of the new manufacturing facility,
construction of the new office facility in south Oklahoma City, and increases in
the rental fleet as necessary to meet demand. Management estimates the Company's
total investment in the new manufacturing facility will be $9 million, including
$3.5 million to equip the facility. As of February 28, 1998, the Company had
incurred approximately $8.4 million related to the manufacturing facility. The
Company expects to begin full production in May 1998. Construction of the new
office facility is expected to commence in April 1998 and be completed in
December 1998. The manufacturing facility includes equipment to allow the
Company to produce parts used in the TTMT Series cooling towers which have been
purchased from outside vendors. Management believes that product costs can be
reduced by producing these parts in-house. However, the Company may continue to
incur unforeseen costs and production problems, particularly in the short term,
in bringing these processes in-house.
The new manufacturing facility has been partially financed with a $4.4
million loan from the Oklahoma Industries Authority (the "OIA") and a portion of
the proceeds of a private placement of $6 million, 10% Convertible Subordinated
Debentures (the "Debentures"). The industrial revenue bonds were issued by the
OIA in October 1996. The bonds are payable in quarterly installments of
principal and interest in the amount of approximately $157,000. A debt service
reserve fund of $157,000 was also set aside from the bond proceeds. The OIA
holds a mortgage on the facility to collateralize the bond indebtedness.
-5-
<PAGE>
The Debentures were issued by the Company during the third quarter of
1997, yielding net proceeds of approximately $5,467,000. The Debentures bear
interest at 10 percent, which is payable semiannually, and mature on June 10,
2000. The principal balance of each Debenture is convertible into shares of
common stock at a price of $8.75 per share at the option of each Debenture
holder or at the option of the Company if the closing price of the common stock
is at least 175% of the conversion price for 20 of 30 consecutive trading days
and certain other conditions are satisfied.
In September 1997, the Company entered into a loan agreement with the
City of Oklahoma City under which a HUD Section 108 loan in the amount of
$1,250,000 is available to the Company for start-up expenses of the
manufacturing facility and associated working capital requirements. As of
February 28, 1998, $285,025 of these funds had been advanced to the Company.
Initially the loan bears interest at 20 basis points above the LIBOR rate,
adjusted monthly, and interest only is payable quarterly. When HUD provides
permanent financing, the interest rate becomes fixed at the rate charged by HUD
to the City and principal and interest are payable quarterly based on an
eight-year amortization period. The loan is collateralized by a second mortgage
on the manufacturing facility.
The Company has entered into an agreement with a lending institution for
a total funding of $1,750,000 for equipment and tooling for the new
manufacturing facility. In November 1997, the Company executed a note payable
for initial funding of $731,890 and in December 1997, the Company executed an
additional note payable for the second funding in the amount of $442,974. The
final funding was in March 1998.
Effective December 31, 1997, the Company entered into a $3,500,000 line
of credit agreement with a financial institution for working capital
requirements and completion of the Company's manufacturing facility in Oklahoma
City. This financing replaced a $2,000,000 line of credit payable to an
individual. The outstanding balance at February 28, 1998 was $2,728,295.
Interest is payable monthly at a variable rate of two basis points over national
prime rate. The loan matures June 30, 1999. The agreement is collateralized by
certain accounts receivable, inventory, rental fleet and patents. The Company
has received a commitment to increase this line of credit to $5,000,000. Also,
negotiations are in process to further increase this line of credit to help fund
increases in the Company's rental fleet.
The Company has a line of credit at Chickasha Bank in the amount of
$400,000 for short-term cash flow needs, of which $7,500 was outstanding at
February 28, 1998. The Company also has a $1,200,000 credit arrangement with one
of its major vendors to fund materials purchased from the vendor of which
$575,840 was outstanding and included in accounts payable at February 28, 1998.
The Company has received a $2,000,000 loan commitment for the Oklahoma
City office facility which is expected to cost approximately $2.1 million. The
commitment to fund is contingent upon completion of normal title procedures.
Management expects to close this financing in April 1998.
-6-
<PAGE>
The Company believes it has sufficient capital resources to fund its
capital requirements for at least the next four quarters. Management is very
pleased with the continued improvement in the Company's liquidity and capital
resources and believes that the Company's improved financial position will
facilitate additional growth. Although the Company's financial position has
improved, substantial growth beyond that expected by management could increase
the Company's capital requirements and require it to obtain additional capital
to maintain its growth. Management recognizes that the Company is highly
leveraged and that while financial leverage can increase the Company's return on
equity, it also increases the risk presented to equity owners of the Company.
Year 2000 Compliance
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, computer
applications could fail or create erroneous results by or at the Year 2000. The
Company is in the process of determining whether its computer programs are
affected by the Year 2000 issue or whether the costs of making its systems Year
2000 compliant or the consequences of failing to take necessary actions would
have a material impact on the Company's financial position or results of
operations. The Company is currently implementing a new financial software
system which is Year 2000 compliant.
Forward Looking Statements
Statements of the Company's or management's intentions, beliefs,
anticipations, expectations and similar expressions concerning future events
contained in this report constitute "forward looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. As with any future event,
there can be no assurance that the events described in forward looking
statements made in this report will occur or that the results of future events
will not vary materially from those described in the forward looking statements
made in this report. Important factors that could cause the Company's actual
performance and operating results to differ materially from the forward looking
statements include, but are not limited to, changes in the general level of
economic activity in the markets served by the Company, competition in the
cooling tower industry and the introduction of new products by competitors,
delays in refining the Company's manufacturing and construction techniques, cost
overruns on particular projects, availability of capital sufficient to support
the Company's level of activity and the ability of the Company to implement its
business strategy, including timely and efficient production of its products and
utilization of the new OKC plant.
Changes In and Disagreements With Accountants on Accounting and Financial
Disclosure.
None.
-7-
<PAGE>
PART II
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits have been filed as part of this registration
statement:
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
4.1-7 Form of 10% Subordinated Convertible Debenture
4.2 Omitted
4.3-1 Form of Stock Certificate
4.4-1 Form of Underwriters' Warrants
4.5-8 Form of Placement Agent Warrants
4.10-3 Registration Rights Agreement, dated February 2, 1996 among
Tower Tech, Inc., Lancer LP, Michael Taglich, and Robert
Taglich.
10.1-5 Promissory Note between Tower Tech, Inc., and Campbell,
Hurley, Campbell and Campbell, dated August 1, 1996.
10.2-10 Loan Agreement between Tower Tech, Inc., and the City of
Oklahoma City, dated September 8, 1997.
10.3-10 Form of Loan Agreement between Tower Tech, Inc., and
Chickasha Bank & Trust, dated September 22, 1997.
10.4-6 Loan Agreement between Tower Tech, Inc., and Oklahoma
Industries Authority dated October 1, 1996
-8-
<PAGE>
10.5-7 Form of Debenture Purchase Agreement among the Company,
Taglich Brothers, D'Amadeo Wagner & Company, Incorporated
and various lenders.
10.6-10 Promissory Note between Tower Tech, Inc. and Electrical
Constructors, dated May 8, 1996
10.7-10 Promissory Note between Tower Tech, Inc., as Maker, and
Electrical Constructors, as Payee, dated May 8, 1996
10.8-1 Promissory Note between Tower Tech, Inc., and Electrical
Constructors, dated March 25, 1997.
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
10.17-4 1993 Stock Option Plan, as amended
10.18 Promissory Note between Tower Tech, Inc. and Southwestern
Bank & Trust Company, dated December 31, 1997
-9-
<PAGE>
10.19 Omitted
10.20 Omitted
10.21 Omitted
10.22 Omitted
10.23 Omitted
10.24 Omitted
10.25 Omitted
10.26 Omitted
10.27 Omitted
10.28 Omitted
10.29 Omitted
10.30 Omitted
10.31-2 Warrant Certificate, dated April 25, 1995,
between J. David Bronstad and Tower Tech,
Inc., entitling J. David Bronstad to purchase
40,000 shares of Tower Tech, Inc.'s common
stock, $.001 par value
10.32-2 Warrant Certificate, dated April 25, 1995,
between James McDonald and Tower Tech, Inc.,
entitling James McDonald to purchase 10,000
shares of Tower Tech, Inc.'s common stock,
$.001 par value
1 Incorporated by reference from the same numbered exhibit to Registration
Statement No. 33-69574-FW, as filed with the Commission on September 29,
1993, and as amended.
2 Incorporated by reference from the same numbered exhibit to Form 10-QSB
for the quarter ended August 31, 1996.
3 Incorporated by reference from the same numbered exhibit to Form 10-KSB/A
for the year ended November 30, 1995.
-10-
<PAGE>
4 Incorporated by reference from the same numbered exhibit to Registration
Statement No. 333-07337 on Form S-8.
5 Incorporated by reference from the same numbered exhibit to Form 10-QSB
for the quarter ended August 31, 1996.
6 Incorporated by reference from the same numbered exhibit to Form 10-KSB
for the year ended November 30, 1996.
7 Incorporated by reference from the same numbered exhibit to Form 10-QSB
for the quarter ended May 31, 1997.
8 Incorporated by reference from the same numbered exhibit to Registration
Statement No. 333-36501, Form S-3, as filed with the Commission on
September 26, 1997.
9 Incorporated by reference from the same numbered exhibit to Form 8-K
filed on July 2, 1996.
10 Incorporated by reference from the same numbered exhibit to Form 10-QSB
for the quarter ended August 31, 1997.
(b) The Company did not file any reports on Form 8-K during the quarter
ended February 28, 1998.
-11-
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOWER TECH, INC.
(Registrant)
Date: April 17, 1998 ss/ HAROLD CURTIS
-------------- -----------------
Harold Curtis, Chief Executive Officer
Date: April 17, 1998 ss/CHARLES D. WHITSITT
-------------- ----------------------
Charles D. Whitsitt, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Consolidated statements of operations found on pages F-1 to F-5 of the Company's
Form 10QSB for the fiscal year 1998 and its qualified in its entirey by
reference to such financial statements.
</LEGEND>
<CIK> 0000913034
<NAME> TOWER TECH, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> FEB-28-1998
<CASH> 176,885
<SECURITIES> 0
<RECEIVABLES> 5,621,501
<ALLOWANCES> 172,645
<INVENTORY> 4,099,770
<CURRENT-ASSETS> 11,664,097
<PP&E> 12,097,717
<DEPRECIATION> 153,889
<TOTAL-ASSETS> 28,464,540
<CURRENT-LIABILITIES> 5,356,400
<BONDS> 0
0
0
<COMMON> 3,527
<OTHER-SE> 6,588,839
<TOTAL-LIABILITY-AND-EQUITY> 28,464,540
<SALES> 4,050,590
<TOTAL-REVENUES> 4,050,590
<CGS> 3,408,561
<TOTAL-COSTS> 4,361,115
<OTHER-EXPENSES> 952,554
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (212,424)
<INCOME-PRETAX> (495,558)
<INCOME-TAX> (198,223)
<INCOME-CONTINUING> (297,335)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (297,335)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
