AASI Aircraft Raises $10 Million; First $5.0 Million Received.

Business Editors

LONG BEACH, Calif.--(BUSINESS WIRE)--March 7, 2000

Advanced Aerodynamics & Structures Inc. (Nasdaq:AASI) today announced that it has received the first $5.0 million of a $10 million private placement from a group of investors.

The private placement comprises the sale of 5-year Series A 5% cumulative convertible preferred stock from AASI Aircraft. The shares are convertible, subject to adjustment in certain circumstances, into AASI common stock at a price equal to $3.69 per share -- a price determined based upon a three-day average closing bid during the period March 1-3, 2000, which was close to the company's 52-week high.

The company said the proceeds of the placement will be used to complete the FAA certification process and for ramping up mass production of its JETCRUZER 500(TM).

Final funding will occur following the filing of a registration statement under the Securities Act of 1933.

Carl L. Chen, Ph.D., chairman and chief executive officer, said: "We are very pleased to have completed this private placement. Not only will it facilitate the completion of the JETCRUZER 500(TM) certification, but also it enhances our cash and equity positions."

The company is in the process of preparing for Jetcruzer 500 graphite composite fuselage pressurization tests and flying maximum cruise speed tests. Completion of these tests is scheduled in the first quarter of 2000.

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 company expects to obtain its FAA Type Certification (TC) amendment and deliver the first JETCRUZER 500s in the later part of 2000.

The company currently has 182 JETCRUZER 500 aircraft orders, representing a backlog of $220 million. 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. It is capable of flying from Los Angeles to New York with only one stop.

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 Securities and Exchange Commission.