AASI Aircraft Establishes $20 Million Equity Line.

Business Editors

LONG BEACH, Calif.--(BUSINESS WIRE)--Aug. 22, 2000

Advanced Aerodynamics & Structures Inc. (Nasdaq:AASI) today announced that it has closed a Private Equity Line of Credit Agreement with private investors.

These investors have committed to purchase up to $20 million of Common Shares over the course of two years.

This private placement agreement provides for AASI to request, at AASI's sole discretion, that the investors purchase certain amounts of shares every 15 days at a price equal to 92% or 93% of the market price. Each request will be for a minimum of $200,000 and subject to a maximum of $1,500,000. The company may not issue more than 3,200,000 shares pursuant to the Equity Line Agreement until it has received approval from the shareholders of the company. The company intends to call a Special Meeting of Shareholders for Sept. 25, 2000, for this purpose. In connection with the Equity Line Agreement, warrants to purchase 250,000 shares have been issued with a strike price of $3.15 per share.

Dr. Carl L. Chen, president and chief executive officer of the company, stated, "The proceeds of the Equity Line will help assure that we can complete both the FAA certification process and the ramping up for mass production of the JETCRUZER 500(TM)."

Initial funding will occur following the effectiveness of a registration statement to be filed under the Securities Act of 1933.

The company has been in the process of preparing for Jetcruzer 500 graphite composite fuselage pressurization tests, flying maximum cruise speed tests and building up three Jetcruzer 500's for flight and structural tests. Completion of these tests has been delayed by 6 months. The new pressurization feature is the primary difference between the Jetcruzer 500 and the Jetcruzer 450(TM) that was FAA certified in June of 1994. The pressurization test was completed successfully after a 4-month delay in May 2000. AASI is one of only two commercial aircraft manufacturers in the world that has completed the pressurization test for a full composite fuselage.

Maximum cruise speed testing is expected to be completed early in the fourth quarter of 2000, at which time full scale production of the JETCRUZER 500 and customer progress payments are expected to begin. The company expects to obtain its FAA Type Certification (TC) amendment in the second quarter of 2001 and deliver the first JETCRUZER 500's in the third quarter of 2001.

The JETCRUZER 500 is a high-speed single engine, corporate propjet aircraft that can accommodate first class seating for six people, including the pilot. Powered by a Pratt & Whitney propjet engine, the JETCRUZER 500 will cruise near jet speeds of 345 miles per hour at altitudes of up to 30,000 ft.

The company currently has a backlog of $226 million.

Advanced Aerodynamics & Structures Inc. is a development-stage company organized to design, develop, have certified by the FAA, manufacture and market propjet and jet aircraft for the world business, commercial and government markets.

Certain statements contained in this news release, including statements concerning the company's future cash and financing requirements, the company's ability to continue to obtain market acceptance of the JETCRUZER 500 aircraft, the company's ability to obtain regulatory approval of the JETCRUZER 500, and the competitive market for sales of small business aircraft and other statements contained herein regarding matters that are not historical facts, are forward-looking statements; actual results may differ materially from those set forth in the forward-looking statements, which statements involve risks and uncertainties, including without limitation those risks and uncertainties set forth in the company's Registration Statement on Form SB-2 under the heading "Risk Factors," and the company's Form 10-KSB and Form 10-QSB on file with the SEC.