AASI Aircraft Posts Results For Third Quarter, Nine Months

LONG BEACH, Calif., Nov. 17, 1998 (PRIMEZONE) -- Advanced Aerodynamics & Structures, Inc. (Nasdaq: AASI) today reported results for the third quarter and nine months ended September 30, 1998, posting net losses, as anticipated, for the periods. Results reflect AASI's status as a developmental stage company that is seeking FAA approval of the JETCRUZER(tm) 500, a new six-passenger aircraft designed for the world business, commercial and government markets.

AASI has received orders for 150 of its JETCRUZER aircraft, representing a backlog of more than $180 million. Based on a new design, the JETCRUZER 500 is a high speed (360 mph) 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 can fly from Los Angeles to New York at altitudes up to 30,000 feet, with only one stop.

AASI completed the first nine months of 1998 with working capital of $4.2 million and a current ratio of 5.7:1. Stockholders' equity stood at $14.3 million, for a book value of $1.60 per share. The company's long-term debt totals $8.5 million.

For the third quarter, the company posted a reduced net loss of $2.3 million, or $0.25 per share, compared with a net loss of $2.4 million, or $0.27 per share, for the same period last year.

For the first nine months, AASI reported a net loss of $6.8 million, or $0.77 per share, versus a net loss of $4.2 million, or $0.48 per share, a year ago. The company said results for the first nine months reflect increased research and development costs associated with the development of the JETCRUZER 500 aircraft.

Dr. Carl Chen, chairman and chief executive officer, said, "Flight tests of the JETCRUZER 500 are continuing satisfactorily. To meet growing customer demand for fully outfitted aircraft, we plan to start fabrication of major components of the JETCRUZER 500 during the first quarter of 1999. Deliveries are expected to begin in second half of 1999."

Subsequent to the end of the third quarter 1998, the company participated in the National Business Aviation Association (NBAA) and Aircraft Owners and Pilot Association (AOPA) general aviation trade shows.

"We were pleased with the response from the general aviation community and potential new customers," Dr. Chen said. "Negotiations are underway to confirm and book orders taken at NBAA and AOPA."

The company has completed construction of its new 200,000 square-foot manufacturing and headquarters building. "Having reached this milestone, we now intend to focus on the final phase of the JETCRUZER 500 development program," Dr. Chen said.

The new manufacturing facility spreads over 10 acres of the Long Beach Municipal Airport and contains a computerized production system, tooling and equipment necessary for producing 120 JETCRUZER aircraft per year, with one work shift.

AASI noted that net proceeds from its initial public offering in December 1996, as well as a new credit agreement that is currently being negotiated, will enable the company to meet its capital requirements through the end of 1999.

Advanced Aerodynamics & Structures, Inc. is a publicly traded, development-stage company organized to design, develop, have certified by the Federal Aviation Administration (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.

                         (A Development Stage Enterprise)

                            Statement of Operations

                                    Three Months Ended         Nine Months Ended
                                       September 30,             September 30,
                                      1998       1997           1998      1997
                                    --------  ---------      --------   --------
Interest income                   $ 209,000   $ 243,000     $ 799,000   $ 884,000
Other income                         94,000          --       187,000       7,000
                                  ---------   ---------     ---------   ---------
                                    303,000     243,000       986,000     891,000

Costs and expenses
  Research and development costs  1,667,000   1,781,000     5,041,000   3,013,000
  Preoperating costs                     --          --            --          --
  General and administrative 
      expense                       795,000     827,000     2,491,000   2,014,000
  Loss on disposal of assets             --          --            --     106,000
  Interest expense                   83,000          --       264,000          --
  In-process research and 
      development acquired               --          --            --          --
                                  2,545,000   2,608,000     7,796,000   5,133,000
                                  ---------   ---------    ---------    ---------
Loss before extraordinary item   (2,242,000) (2,365,000)   (6,810,000) (4,242,000)
Extraordinary loss on retirement 
   of Bridge Notes                       --          --           --           --
Net loss                         (2,242,000) (2,365,000)  (6,810,000)  (4,242,000)
Net loss per common share             (0.25)      (0.27)       (0.77)       (0.48)
                                   ---------   ---------    ---------    ---------
Weighted average number of 
      shares outstanding           8,900,000   8,900,000    8,900,000    8,900,000
                                   ---------   ---------    ---------    ---------

                            (A Development Stage Enterprise)

                                 Balance Sheet Data

                                                               September 30, 1998
Current Assets:
   Cash and cash equivalents                                         $  3,378,000
   Certificate of deposit                                                  12,000
   Short-term investments                                               1,333,000
   Prepaid expenses and other current assets                              351,000
   Total current assets                                                 5,074,000

Restricted cash                                                        11,308,000
Property and equipment, net                                             1,904,000
Construction in progress                                                5,942,000
Other assets                                                              595,000

     Total assets                                                    $ 24,823,000

Liabilities and Stockholders' Equity
Current Liabilities:
   Accounts payable                                                  $   463,000
   Accrued liabilities                                                   425,000
   Total current liabilities                                             888,000
Long-term debt                                                         8,500,000
Deferred revenue                                                       1,150,000

     Total liabilities                                                10,538,000

Stockholders' equity
  Preferred Stock, par value $.0001 per share; 5,000,000
    shares authorized; no shares issued and   outstanding                     --
  Class A Common Stock, par value $.0001 per share; 60,000,000
    shares authorized; 6,999,676 shares issued and outstanding             1,000
  Class B Common Stock, par value $.0001 per share;
    10,000,000 shares authorized; 1,900,324 shares issued and outstanding     --
  Class E-1 Common Stock; par value $.0001 per share;
    4,000,000 shares authorized; 4,000,000 shares issued and outstanding      --
  Class E-2 Common Stock; par value $.0001 per share;
    4,000,000 shares authorized; 4,000,000 shares issued and outstanding      --
  Warrants to purchase common stock
      Public Warrants                                                    473,000
      Class A Warrants                                                11,290,000
      Class B Warrants                                                 4,632,000
  Additional paid-in capital                                          35,652,000
  Deficit accumulated during the development stage                   (37,763,000)

      Total stockholders' equity                                      14,285,000

      Total liabilities and stockholders' equity                  $   24,823,000


     Contact:   David M. Turner, Vice President and
                Chief Financial Officer
                Advanced Aerodynamics & Structures, Inc.
                (562) 938-8618

                Michael Pollock/Roger Pondel
                Pondel Parsons & Wilkinson
                (310) 207-9300