SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

ADVANCED AERODYNAMICS AND STRUCTURES, INC.
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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ADVANCED AERODYNAMICS & STRUCTURES, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held June 1, 2001

TO THE SHAREHOLDERS OF ADVANCED AERODYNAMICS & STRUCTURES, INC.:

You are cordially invited to attend the Annual Meeting of Shareholders
of Advanced Aerodynamics & Structures, Inc. ("AASI" or the "Company"), which
will be held in the Multi-Purpose Room, AASI Headquarters, 3205 Lakewood Blvd.,
Long Beach, California 90808, on Friday, June 1, 2001, at 10:00 a.m. Pacific
time, to consider and act upon the following matters:

1. The election of six (6) directors;

2. The ratification of the authorization of 115,000,000 additional
shares of Class A Common Stock of the Company;

3. The authorization and ratification of: (i) the issuance and sale in
private placements of up to $7,100,000 of the Company's 5% secured
convertible notes (the "Notes"), and (ii) the issuance of that
number of shares of the Company's Class A Common Stock, no par value
("Common Stock"), issuable upon conversion of the Notes being
approved for issuance, based on the conversion formula set forth in
the Notes;

4. The approval of our 2001 Stock Option Plan;

5. The ratification of the selection of Ernst & Young LLP to serve as
auditors of the Company for the fiscal year ending December 31,
2001; and

6. Such other business as may properly come before the Meeting or any
adjournments of the Meeting.

Only holders of record of Common Stock of the Company at the close of
business on April 24, 2001 will be entitled to notice of, and to vote at, the
Annual Meeting and any adjournments of the Annual Meeting.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. YOU ARE INVITED TO ATTEND THE
MEETING IN PERSON, BUT WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE WHICH REQUIRES
NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES. IF YOU DO ATTEND THE
MEETING, YOU MAY, IF YOU PREFER, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN
PERSON.

By Order of the Board of Directors

/s/ CARL CHEN
Carl Chen, Ph.D.
Chairman of the Board,
President and Chief Executive Officer

3205 Lakewood Blvd.
Long Beach, California 90808
(562) 938-8618
May 4, 2001

PROXY STATEMENT

ADVANCED AERODYNAMICS & STRUCTURES, INC.

3205 Lakewood Boulevard
Long Beach, California 90808
________________

ANNUAL MEETING OF SHAREHOLDERS

To Be Held June 1, 2001

Solicitation of Proxies

This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Advanced Aerodynamics & Structures,
Inc., a Delaware corporation (the "Company") for use at the Annual Meeting of
Shareholders to be held in the Multi-Purpose Room, AASI Headquarters, 3205
Lakewood Blvd., Long Beach, California 90808, on Friday, June 1, 2001, at 10:00
a.m. Pacific time, and at any and all adjournments thereof (the "Annual
Meeting"), for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. Accompanying this Proxy Statement is the Board of
Directors' Proxy for the Annual Meeting, which you may use to indicate your vote
as to the proposals described in this Proxy Statement. In addition to
solicitation by use of the mail, certain of the Company's officers and employees
may, without receiving additional compensation therefor, solicit the return of
proxies by telephone, telegram or personal interview. The Company has requested
that brokerage houses and custodians, nominees and fiduciaries forward
soliciting materials to their principals, the beneficial owners of Common Stock,
and has agreed to reimburse them for reasonable out-of-pocket expenses in
connection therewith.

Revocation of Proxies

All Proxies which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will be
voted in favor of the proposals described in this Proxy Statement unless
otherwise directed. A Shareholder may revoke his or her Proxy at any time
before it is voted either by filing with the Secretary of the Company, at its
principal executive offices, a written notice of revocation or a duly executed
proxy bearing a later date or by attending the Annual Meeting and expressing a
desire to vote his or her shares in person.

Record Date and Voting Securities

The close of business on April 24, 2001 has been fixed as the record
date for the determination of Shareholders entitled to notice of and to vote at
the Annual Meeting or any adjournment of the Annual Meeting. As of the record
date, the Company had outstanding: 21,469,546 shares of Class A Common Stock,
par value $.0001 per share; 1,900,324 shares of Class B Common Stock, par value
$.0001 per share; 4,000,000 shares of Class E-1 Common Stock, par value $.0001
per share; 4,000,000 shares of Class E-2 Common Stock, par value $.0001 per
share; and 50,000 shares of Series A Preferred Stock. The Class A Common Stock,
Class B Common Stock, Class E-1 Common Stock and Class E-2 Common Stock are
substantially identical, except that the holders of Class A Common Stock have
the right to cast one vote, and the holders of Class B Common Stock, Class E-1
Common Stock, and Class E-2 Common Stock have the right to cast five votes, for
each share held of record on all matters submitted to a vote of the holders of
Common Stock, including the election of directors. The Class A Common Stock,
Class B Common Stock, Class E-1 Common Stock and Class E-2 Common Stock vote
together as a single class on all matters on which stockholders may vote,
including the election of directors, except when voting by individual class is
required by applicable law. The Series A Preferred Stock does not vote, except
on matters where a separate vote of the Series A Preferred Stock would be
required by the Delaware General Corporation Law. Subject to the preferential
rights of the holders of the Series A Preferred Stock, holders of the Class A
Common Stock, Class B Common Stock, Class E-1 Common Stock and Class E-2 Common
Stock have equal ratable rights to dividends from funds legally available
therefor, when, as and if declared by the Board of Directors and are entitled to
share ratably, as a single class, in all of the assets of the Company available
for distribution to the holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the affairs of the Company. Except as
1

described herein, no preemptive, subscription, or conversion rights pertain to
the Common Stock and no redemption or sinking fund provisions exist for the
benefit thereof.

Pursuant to the General Corporation Law of the State of Delaware, only
votes cast "FOR" a matter constitute affirmative votes, except proxies in which
the stockholder fails to make a specification as to whether he votes "FOR,"
"AGAINST," "ABSTAINS" or "WITHHOLDS" as to a particular matter shall be
considered as a vote "For" that matter. Votes will be tabulated by an inspector
of election appointed by the Board of Directors. Votes in which the stockholder
specified that he is "WITHHOLDING" or "ABSTAINING" from voting is counted for
quorum purposes, but are not considered as votes "For" a particular matter.
Broker non-votes (shares held by a broker or nominee which are represented at
the meeting, but with respect to which the broker or nominee is not empowered to
vote on a particular proposal) are counted for quorum purposes, but are not
considered as votes "For" a particular matter.

Mailing of Proxy Statement and Proxy Card

The Company's Annual Report for 2000 is enclosed for your convenience
but is not to be considered part of the solicitation material. The Company will
pay the cost for preparing, printing, assembling and mailing this Proxy
Statement and the Proxy Card and all of the costs of the solicitation of the
Proxies.

The Company's principal executive offices are located 3205 Lakewood
Blvd., Long Beach, California 90808. This Proxy Statement and the accompanying
proxy is first being mailed to Shareholders on or about May 4, 2001.

PROPOSAL 1
ELECTION OF DIRECTORS

In accordance with the Certificate of Incorporation and Bylaws of the
Company, the Board of Directors consists of not less than three nor more than
seven members, the exact number to be determined by the Board of Directors. At
each annual meeting of the Shareholders of the Company, directors are elected
for a one year term, or until their successors are elected or appointed. The
Board of Directors is currently set at five members. The Board of Directors
proposes the election of the nominees named below.

Unless marked otherwise, proxies received will be voted FOR the
election of each of the nominees named below, unless authority is withheld. If
any such person is unable or unwilling to serve as a nominee for the office of
director at the date of the Annual Meeting or any postponement or adjournment
thereof, the proxies may be voted for a substitute nominee, designated by the
proxy holders or by the present Board of Directors to fill such vacancy. The
Board of Directors has no reason to believe that any such nominee will be
unwilling or unable to serve if elected a director.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE ELECTION OF THE DIRECTORS NOMINATED HEREIN.

The Board of Directors proposes the election of the following nominees
as members of the Board of Directors:

Carl L. Chen, Ph.D.
C.M. Cheng
James A. Lovell
S. B. Lai, Ph.D.
Roy H. Norris
Hon. Robert P. Kaplan

If elected, the nominees are expected to serve until the 2002 Annual
Meeting of Shareholders.

Information with Respect to Each Nominee and Executive Officers.

The following table sets forth certain information with respect to
each nominee and executive officer of the Company as of March 31, 2001.

Name Age Position
---- --- --------

Carl Leei Chen, Ph.D. 54 Chairman of the Board, President, Chief
Executive Officer, Director and Director
Nominee
C.M. Cheng 53 Consultant to the Company, Director and
Director Nominee
James A. Lovell 72 Director and Director Nominee
S. B. Lai, Ph.D. 49 Director and Director Nominee
Roy H. Norris 56 Director Nominee
Hon. Robert P. Kaplan 64 Director Nominee

Other Officers:

Gene Comfort 57 Executive Vice President and General Manager
David M. Turner, CPA 65 Vice President Finance and Administration,
Chief Financial Officer, and Secretary
Michael W. Lai 53 Vice President Engineering

Directors serve until the next annual meeting or until their
successors are elected or appointed. All officers are appointed by and serve at
the discretion of the Board of Directors, other than Dr. Chen, who has an
employment agreement with the Company. See Management - Employment Agreement.
There are no family relationships between any directors or officers of the
Company.

Dr. Carl L. Chen is the founder of the Company and has been its
President and a director since the Company's incorporation in January 1990 and
the Chief Executive Officer of the Company since December 1994. From January
1992 to October 1995, Dr. Chen served as President, and since January 1992 has
been a minority stockholder, of Union China Investment and Development Group,
Inc. (Union China), a company located in Monterey Park, California, which was
formed to invest in commercial real estate. Union China confirmed a plan of
reorganization pursuant to Chapter 11 of the Federal bankruptcy laws in August
1995. The bankruptcy case for Union China was closed in May 1996 pursuant to a
Final Decree and Order Closing Case entered by the Bankruptcy Court for the
Central District of California. Since January 1992, Dr. Chen has served as the
President of California Aerospace Technology, Inc., a consulting company for the
satellite industry, located in Monterey Park, California. Dr. Chen was Chairman
of SIDA Corporation, a high technology trading company located in Monterey Park,
California, from 1989 to May 1996. Prior to founding the Company in 1990, Dr.
Chen was a Satellite System Engineering Manager at Hughes Space and
Communications, Inc. for 15 years. Dr. Chen has a Ph.D. in Engineering from the
California Institute of Technology and Masters Degrees in Control Engineering
and Aerospace Engineering from UCLA and West Virginia University, respectively.
Dr. Chen is a graduate of the Owner/President Management program at the Graduate
School of Business Administration of Harvard University.

C.M. Cheng is a consultant to the Company and has served as a director of
the Company since June 1996. Since April 1996, Mr. Cheng has been a Vice
President of Eurotai International, Ltd., a private company located in Taipei,
Taiwan, which distributes health food products. From 1984 to April 1996, Mr.
Cheng served as a Vice President, Director of the Office of the President, and
Manager of Corporate Planning with Taiwan Yeu Tyan Machinery, Mfg. Co. Ltd., a
public company located in Taipei, Taiwan, which manufactures automobiles and
heavy equipment. From 1980 to 1983, Mr. Cheng was an Associate Professor of
Economics and Management at Taiwan National Sun-Yet-Sen University. Mr. Cheng
is the director of Harpa Limited, a corporation organized under the

laws of the Cayman Islands (Harpa), a principal stockholder of the Company. See
Certain Relationships and Related Transactions and Principal Shareholders.

James A. Lovell Jr. is the former spacecraft commander of the Apollo
13 mission and has served as a director of the Company since June 2000. He
currently is the President of Lovell Communications, a business devoted to
disseminating information about the United States Space Program. Prior to that
he was Executive Vice President of Centel Corporation. Mr. Lovell is a Fellow
in the Society of Experimental Test Pilots and a member of the Golden Eagles.
He has been granted many honors and awards, including the Presidential Medal for
Freedom, the French Legion of Honor and the Congressional Space Medal of Honor.
In 1994 he and Jeff Kluger wrote Lost Moon, the story of the Apollo 13 mission.

S. B. Lai has served as director of the Company since October 1997.
Mr. Lai is currently a Professor with the Graduate School of Business
Administration, National Chengchi University, Republic of China; the Secretary
General, Chinese Management Association, Republic of China; a third term
Republic of China National Assemblyman, Republic of China; and is Judge and
Committeeman of the National Quality Award. Over the past five years, Mr. Lai
has also served as a Director of the Ta-Yeh University, Republic of China;
Secretary General of the Chinese Management Association, Republic of China; and
is a consulting committeeman for the Ministry of Economic Affairs and the
Ministry of Education Affairs of the Republic of China. Mr. Lai received a BSME
and MBA from National Cheng-Kung University and a MSISE and Ph.D. from the
University of Southern California.

Roy H. Norris is currently a private business consultant with
extensive experience in the aviation industry. From 1994 to 1997, he served as
President of Raytheon Aircraft (formerly Beech Aircraft), a $2.3 billion
enterprise. Previously, Mr. Norris was President and Chief Executive Officer of
Raytheon Corporate Jets, a division of Raytheon which merged into Raytheon
Aircraft in 1994. He also has served as Vice President of Sales and Marketing
for Gulfstream Aerospace and Senior Vice President for Marketing and Sales for
Cessna Aircraft Company. Mr. Norris has a degree in Chemical Engineering from
Auburn University and was named its Outstanding Engineering Graduate for 1997.

Hon. Robert P. Kaplan has served as the Canadian Solicitor General
and also was a member of the Parliament of Canada from 1968 until 1993, when he
retired from elective politics. Since leaving public life in 1993, Mr. Kaplan
has, among other things, engaged in trade and investment in the Former Soviet
Union. He serves as a director of Hurricane Hydrocarbons Limited, a Calgary-
based company which owns oil fields and a major refinery in Kazakhstan,
producing 10% of that country's oil. It is listed on the Toronto, Frankfurt and
Alberta Stock Exchanges. Mr. Kaplan graduated with an Honours B.A. in Sociology
(Criminology) and an L.L.B. from the University of Toronto in 1961. He was
called to the Bar in Ontario in 1963, and practiced law with Toronto law firms
doing tax and corporate work until 1968.

Gene Comfort has been the Executive Vice President and General Manager
of the Company since September 1995. He served as a director of the Company
from May 1996 through March 2000. From July 1993 to September 1995, Mr. Comfort
was the Vice President-Marketing of the Company, and he was the Director of
Marketing of the Company from April 1991 to July 1993. Mr. Comfort has been
involved in the aircraft industry for over 25 years in a variety of marketing,
sales and management positions. Mr. Comfort is a single and multi engine rated
pilot.

David M. Turner, CPA joined the Company in January 1997. Prior to
that, from 1994, he served as the Chief Financial Officer of Taitron
Incorporated, a publicly held company that distributes discrete semiconductors.
From 1991 to 1994, Mr. Turner was President and sole owner of Maynard
Enterprises, Incorporated, a privately held consulting business working
primarily in the health care industry. From 1988 to 1991, Mr. Turner was the
Chief Financial Officer and Corporate Vice President of Finance of the Greater
Southeast Management Company, a Washington D.C. company that operated an inner
city health care system, which included two hospitals, three nursing homes and
several subsidiary health care companies in the Mid Atlantic area. During the
same period, Mr. Turner was President and a Director of Greater Southeast Asset
Management Company, the asset-holding subsidiary of the Greater Southeast
Healthcare System. Mr. Turner received a Master of Business of Administration
from the University of Cincinnati.

Michael W. Lai joined the Company in May 1, 1998. Mr. Lai is in
charge of Engineering operations for the high performance JETCRUZER(TM) 500
single engine propjet aircraft and the long range, STRATOCRUZER(TM) twin jet
aircraft. He brings a vast and extensive Aerospace, Engineering and Management
background to AASI as Director, President, General Manager and Design Engineer
for major aerospace corporations. Mr. Lai's impressive

background includes: Design Engineer for Volpar Inc., on 707, 727 and DC-9
aircraft; Airframe Designer for Saunders Aircraft Corp., Ltd. Gimli Canada
on ST-27 commuter aircraft; and Associate Engineer for Continental Airlines, on
DC-9, DC-10 and Boeing 727 commercial aircraft. Mr. Lai is a FAA, FAR 23 and 25
Designated Engineering Representative (DER) in Airframes, Structures, Systems
and Equipment. He is a licensed pilot and has a Masters in Systems Engineering
from West Coast University, Los Angeles, CA, a B. S. in Applied Mathematics
(Engineering Option) and an A. A. in Aircraft Maintenance Technology from
Northrop institute of Technology, Inglewood CA. Mr. Lai also holds FAA, A&P and
Transport Canada, Aircraft maintenance Licenses AML.

The Board of Directors held two meetings in 2000 and all Directors
were present at each meeting. No director attended fewer than seventy-five
percent (75%) of the aggregate number of meetings held by the Board of Directors
and the committees on which he served during 2000. The Board of Directors has an
Audit Committee which reviews the results and scope of the audit and other
accounting related matters. The members of the Audit Committee are currently
Messrs. Lai and Lovell. The Audit Committee held one meeting during 2000.

Audit Fees

The aggregate fees billed by Ernst & Young for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended December 31, 2000 and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-QSB for that
fiscal year were $89,950.

Financial Information Systems Design and Implementation

There were no fees billed by Ernst & Young for professional services
rendered for information technology services relating to financial information
systems design and implementation for the fiscal year ended December 31,
2000.

All Other Fees

The aggregate fees billed by Ernst & Young for services rendered to
the Company for the fiscal year ended December 31, 2000, other than for services
described above under "Audit Fees," were $101,420.

The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the principal accountant's
independence.

Audit Committee Charter

During 2000, the Company's Board of Directors adopted a written
charter for the Audit Committee, which established operating guidelines for the
Audit Committee. Attached to this Proxy Statement as Appendix A is a copy of
the Charter of the Audit Committee.

Audit Committee Report

THE FOLLOWING REPORT OF THE AUDIT COMMITTEE SHALL NOT BE DEEMED TO BE SOLICITING
MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY
REFERENCE IN ANY DOCUMENT SO FILED.

AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed the Company's audited
financial statements with Company management and has discussed certain required
matters with the Company's independent auditors, in accordance with Statement of
Auditing Standards No. 61.

The Company's independent auditors also provided written documentation to
the Audit Committee, describing all relationships between the auditors and the
Company that might bear on the auditors' independence as required by
Independence Standards Board Standard No. 1. The Audit Committee discussed with
the auditors any relationships that may impact their objectivity and
independence and satisfied itself as to the auditors' independence.

Based on the above-mentioned reviews and discussions with management and
the independent auditors, the Audit Committee recommended to the Board that the
Company's audited financial statements be included in its Annual Report on Form
10-KSB for the fiscal year ended December 31, 2000. The Audit Committee also
recommended the re-appointment of the independent auditors and the Board
concurred in such recommendation. Both members of the Audit Committee are
considered to be "independent directors," as defined in NASDAQ Marketplace Rule
4200.

AUDIT COMMITTEE

James A. Lovell, Jr.
S. B. Lai

The Company has agreed to nominate a designee of the Underwriter of
its recent public offering who is reasonably acceptable to the Company for
election to the Company's Board of Directors, if so requested by the
Underwriter, for a period of five years from December 6, 1996.

MANAGEMENT

EXECUTIVE COMPENSATION

The following tables set forth certain information as to the Company's
Chief Executive Officer and each of the Company's four most highly compensated
executive officers whose total annual salary and bonus for the fiscal year
ending December 31, 2000 exceeded $100,000:

SUMMARY COMPENSATION TABLE

Annual Compensation(1)
--------------------------------------------------------
Other
Name and Principal Position Year Salary Bonus Compensation
- ------------------------------------------------------------------------------------------------------------------

Carl L. Chen, Ph.D. 2000 $200,000 $0 $39,248(2)
Chairman and Chief Executive 1999 $191,000 $0 $39,248(2)
Officer 1998 $200,000 $0 $39,248(2)

Gene Comfort 2000 $153,000 $0 $0
Executive Vice President 1999 $143,000 $0 $0
1998 $160,961 $0 $0

_____________________

(1) The compensation described in this table does not include medical insurance,
retirement benefits and other benefits which are available generally to all
employees of the Company and certain perquisites and other personal
benefits, the value of which did not exceed the lesser of $50,000 or 10% of
the executive officer's compensation in the table.

(2) Represents premium for life insurance paid by the Company on behalf of
Dr. Chen.

EMPLOYMENT AGREEMENT

The Company entered into an eight-year employment agreement (the Chen
Employment Agreement) with Dr. Carl Chen, the Company's, Chairman, Chief
Executive Officer and President, commencing in May 1996. The Chen Employment
Agreement provides that, in consideration for Dr. Chen's services, he is to be
paid an annual salary of $200,000. He will receive increases in salary and
bonuses as deemed appropriate by the Board of Directors. The Company will
maintain life insurance coverage on Dr. Chen, and Dr. Chen may name the
beneficiary of such policy. The Chen Employment Agreement also provides that he
will not compete with the Company during the term of the Chen Employment
Agreement and for eighteen months thereafter and that, if Dr. Chen's employment
is terminated by the Company without cause (as defined therein), he will receive
up to eighteen months' salary as severance, payable monthly commencing on the
thirtieth day following such termination without cause.

COMPENSATION OF DIRECTORS

Non-employee directors receive $2,500 for each Board of Directors meeting
attended. The Company pays all out-of-pocket expenses of attendance.

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 2001, by (i) each person
who is known by the Company to own beneficially more than 5% of any class of the
Company's outstanding voting securities, (ii) each of the Company's directors
and executive officers, and (iii) all officers and directors of the Company as a
group.

Common Stock
Name and Address of Beneficially Percent of
Title of Class Beneficial Owner(1) Owned(2) Ownership
- ---------------------------------------------------------------------------------------------------

Class A Common Stock Carl. L. Chen, Ph.D.(3) 75,000 less than 1%
Class B Common Stock 826,751 43.5%
Class E-1 Common Stock 1,653,503 41.34%
Class E-2 Common Stock 1,653,503 41.34%

Class A Common Stock Gene Comfort(4) 15,000 less than 1%
Class B Common Stock 60,001 3.15%
Class E-1 Common Stock 120,000 3.00%
Class E-2 Common Stock 120,000 3.00%

Class A Common Stock C.M. Cheng(4)(5) 15,000 less than 1%
Class B Common Stock 1,013,572 53.33%
Class E-1 Common Stock 2,027,144 50.67%
Class E-2 Common Stock 2,027,144 50.67%

Class A Common Stock James A. Lovell Jr.(4) 11,000 less than 1%

Class A Common Stock S.B. Lai, Ph.D.(7) 10,000 less than 1%

Class A Common Stock David Turner(8) 18,300 less than 1%

Class A Common Stock All executive 119,300 less than 1%
Class B Common Stock officers and 1,900,324 100%
Class E-1 Common Stock directors as a group 3,800,647 95.02%
Class E-2 Common Stock (6 persons) 3,800,647 95.02%

Class B Common Stock Harpa Limited(6) 1,013,572 53.33%
Class E-1 Common Stock 2,027,144 50.67%
Class E-2 Common Stock 2,027,144 50.67%

Class B Common Stock Shih Jen Yeh(6) 1,013,572 53.33%
Class E-1 Common Stock 2,027,144 50.67%
Class E-2 Common Stock 2,027,144 50.67%

Class B Common Stock Chyao Chi Yeh(6) 1,013,572 53.33%
Class E-1 Common Stock 2,027,144 50.67%
Class E-2 Common Stock 2,027,144 50.67%

Class A Common Stock Austinvest Anstalt 1,188,166 5.90%
Balzers(9)

Class A Common Stock Esquire Trade & 775,755 3.86%
Finance Inc. (10)

_____________________

(1) Except as otherwise indicated, the address of each principal stockholder is
c/o the Company at 3205 Lakewood Blvd., Long Beach, California 90808. The
Company believes that all persons named have sole voting power and sole
investment power, subject to community property laws where applicable.

(2) The Common Stock of the Company is divided into four classes. Each share of
Class B Common Stock, Class E-1 Common Stock and Class E-2 Common Stock is
entitled to five votes per share, and Class A Common Stock is entitled to
one vote per share. The shares of Class E Common Stock are subject to
redemption by the Company if the Company does not achieve certain income or
market price levels.

(3) Includes 200,000 shares of Class E-2 Common Stock held by Julie C. Chen, as
trustee of the Eric F. Chen Trust under Declaration of Trust dated August
31, 1996, for the benefit of Eric F. Chen, Dr. Chen's son. Julie Chen is
Dr. Chen's sister-in-law. Dr. Chen disclaims beneficial ownership of the
200,000 shares held by the Trust for the benefit of his son. Excludes
75,000 shares of Class A Common Stock issuable upon the exercise of options
not exercisable within 60 days and includes options for 25,000 shares of
Class A Common Stock which are currently exercisable.

(4) Excludes 20,000 shares of Class A Common Stock issuable upon the exercise
of options which are not exercisable within 60 days and includes options
for 15,000 shares of Class A Common Stock which are currently exercisable.

(5) Includes 5,067,860 shares of Common Stock held by Harpa Limited, a Cayman
Island corporation (Harpa). C.M. Cheng is a director of Harpa and has sole
voting and investment control over the shares of Common Stock held by Harpa
and thus may be deemed to beneficially own such shares. Mr. Cheng disclaims
beneficial ownership of such shares. The address of Harpa is c/o Coutts Co.
(Cayman) Ltd., Coutts House, P.O. Box 707, West Bay Road, Grand Cayman,
Cayman Islands.

(6) The voting stock of Harpa is currently held equally by Shih Jen Yeh and
Chyao Chi Yeh, who are children of Song Gen Yeh, the former Chairman and
principal stockholder of the Company. See Certain Transactions. The address
of Mr. Shih Jen Yeh and Mr. Chyao Chi Yeh is 14th Floor, No. 55, Section 2,
Chung-Cheng Road, Shih-Lin District, Taipei, Taiwan.

(7) Excludes 25,000 shares of Class A Common Stock issuable upon the exercise
of options which are not exercisable within 60 days and includes options
for 10,000 shares of Class A Common Stock issuable upon the exercise of
options which are currently exercisable.

(8) Excludes 12,000 shares of Class A Common Stock issuable upon the exercise
of options which are not exercisable within 60 days and includes 18,000
shares of Class A Common Stock issuable upon the exercise of options.

(9) The address for Austinvest Anstalt Balzers is Landstrasse 938, 9494
Furstentums, Balzers, Liechtenstein.

(10) The address for Esquire Trade & Finance Inc. is Trident Chambers, Road
Town, Tortola, B.V.I..

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely upon a review of copies of reports on Form 3, Form 4 and
Form 5 furnished to the Company, and written representations to the Company from
reporting persons, the Company believes that none of its officers, directors or
beneficial owners of over 10% of the Company's Common Stock failed to timely
file required reports under Rule 16(a) of the Securities and Exchange Act of
1934, as amended, during 2000 or previous fiscal years.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

PROPOSAL 2

RATIFICATION OF THE AUTHORIZATION OF ADDITIONAL SHARES

Our Certificate of Incorporation currently authorizes 200,000,000 shares of
Class A Common Stock pursuant to a consent of majority shareholders executed on
April 25, 2001. The authorization of the increase of an additional 115,000,000
common stock shares over the previously authorized 85,000,000 needs to be
ratified by you to enable the Board of Directors to obtain access to additional
equity financing necessary to fund general working capital requirements and the
expansion of business operations. AASI has no current plans to use this increase
in stock for purpose of merger and/or acquisition.

If the proposed amendment is approved, the additional authorized, but
unissued shares of Common Stock will be identical in all respects to presently
authorized shares of Common Stock. The Board of Directors believes that an
increase in the number of authorized shares of Common Stock is desirable in
order to provide the Company with shares which will be available for issuance
from time to time, without further action or authorization by the stockholders,
as needed for such proper corporate purposes as may be determined by the Board
of Directors. Such corporate purposes might include, among other things, the
Company's ability to fulfill its obligations under the Notes and Warrants
described in Proposal 3, below, the raising of capital funds through private or
public offerings, the acquisition by the Company of other companies, declaration
of stock splits or stock dividends, the issuance of stock under options granted
or to be granted under various stock incentive plans or other benefit plans for
the Company's employees and non-employee Directors and the issuance of stock
under warrants granted or to be granted in the future.

It should be noted that the issuance of additional shares of Common Stock
could have a detrimental effect upon existing holders of the Company's Common
Stock since such issuance may, among other things, have a dilutive effect on the
earnings per share of Common Stock and the voting rights of holders of the
Common Stock. Although authorization of additional shares of Common Stock is
recommended by the Board of Directors for the reasons stated herein, and not
because of any possible anti-takeover effect, such additional authorization of
shares of Common Stock could be used by incumbent management to make more
difficult, and thereby discourage, an attempt to acquire control of the Company,
even though stockholders of the Company may deem such an acquisition desirable.
For example, the shares could be privately placed with purchasers who might
support the Board of Directors in opposing a hostile takeover bid. The issuance
of new shares could also be used to dilute the stock ownership and voting power
of a third party seeking to remove the Directors, replace incumbent Directors,
accomplish certain business combinations or alter, amend, or repeal portions of
the Certificate of Incorporation.

Under Delaware law, an amendment of a Certificate of Incorporation to
effectuate a change in the number of shares of the authorized capital stock of a
corporation requires the approval of a majority of the outstanding stock
entitled to vote thereon. In this instance, the holders of a majority of Common
Stock consented to the amendment. The ratification of the amendment by the
holders of a majority of Common Stock is currently sought.

The Board of Directors has unanimously approved and recommends that
the shareholders ratify the authorization of the additional 115,000,000 common
stock shares.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 2.

PROPOSAL 3

APPROVAL OF ISSUANCE AND SALE OF
5% SECURED CONVERTIBLE NOTES, AND
COMMON STOCK ISSUABLE UPON CONVERSION OF NOTES

On March 22, 2001, the Company completed the sale to a group of investors
(the "Investors") by private placement of $4,100,000 original principal amount
of 5% secured convertible notes (the $4,100,000 of notes together with $328,000
of notes issuable as commissions, the "Initial Notes"). The Company issued one
warrant for each dollar of Initial Notes purchased, or an aggregate of 4,100,000
warrants (the "Initial Warrants"), each exercisable for two shares of Common
Stock, or an aggregate of 8,200,000 shares of Common Stock (subject to
adjustment for stock dividends, combinations or splits with respect to the
underlying Common Stock). The Initial Warrants have a term of three years and
may be exercised at a price of $0.446875 per share, which is equal to one
hundred ten percent (110%) of the closing price of the Common Stock on the
NASDAQ National Market System on the trading day preceding the closing date of
the sale of the Initial Notes. The Company used the proceeds from the offering
of the Initial Notes to fund general working capital requirements.

On March 22, 2001, the Company also obtained commitments from the Investors
to purchase up to an additional $3,000,000 original principal amount of 5%
secured convertible notes (the $3,000,000 of notes together with $240,000 of
notes issuable as commissions, the "Put Notes"). Upon the purchase of the Put
Notes, the purchasers will receive warrants (the "Put Warrants") to purchase up
to an aggregate of 6,000,000 shares of Common Stock (subject to adjustment for
stock dividends, combinations or splits with respect to the underlying Common
Stock) at a price equal to 110% of the closing bid price of the Common Stock on
the day the Company gives notice to the purchasers of its intention to exercise
its right (the "Put") to require the purchasers to purchase the Put Notes. The
Put Warrants are exercisable on the date of receipt of the Put exercise notice,
and expire three years thereafter. Other than with respect to exercise price and
expiration date, the terms of the Put Warrants are identical to the terms of the
Initial Warrants.

The Company intends to use the proceeds from the sale of the Initial Notes
and Put Notes to fund general working capital requirements and the expansion of
its business operations.

The Company's right to exercise the Put is contingent upon satisfaction of
the following conditions:

- the receipt of shareholder approval (as more fully discussed below
under "Reason for Shareholder Approval");
- that the Company continue to be a fully reporting public company with
no material adverse change in the Company's business;
- no Event of Default with respect to the Initial Notes; the Company's
ongoing compliance with Nasdaq National Market System or Nasdaq
SmallCap Market listing requirements;
- the execution and delivery by the Company and the subscribers of
appropriate documents evidencing the transaction substantially in the
form previously agreed upon;
- the daily weighted average price of the Common Stock multiplied by the
daily trading volume from the Closing Date through August 31, 2001, is
not less than $15,000,000 in the aggregate; and
- the effectiveness of a registration statement covering the shares
issuable upon conversion of the Initial Notes, the Initial Warrants,
the Put Notes and the Put Warrants.

REASON FOR SHAREHOLDER APPROVAL

Pursuant to the terms of the Subscription Agreement governing the sale and
issuance of the Initial Notes and the Put Notes (collectively, the "Notes") and
the Initial Warrants and the Put Warrants (collectively, the "Warrants"), the
Company covenanted to obtain shareholder approval of the issuance of shares of
Common Stock in excess of 19.9% of the outstanding Common Stock upon conversion
of the Notes and exercise of the Warrants (the "Approval"). Until the Company
obtains the Approval, the issuance of shares of Common Stock upon conversion of
the Notes and exercise of the Warrants, collectively, in excess of 19.9% of the
outstanding Common Stock would violate Nasdaq Marketplace Rule 4310(c)(25)(H)
(the "Nasdaq Rule"). Until such approval is obtained, the maximum number of
shares of Common Stock that can be issued upon conversion of the Notes and
exercise of the

Warrants is 3,774,541, which represents 19.9% of the number of shares of the
Common Stock outstanding as of March 22, 2001, the date of the issuance of the
Initial Notes and the Initial Warrants.

Rule 4310(c)(25)(H) requires shareholder approval for the issuance of
shares of Common Stock in a transaction involving the sale or issuance by a
company of common stock, or securities convertible into common stock, equal to
20% or more of the common stock or 20% or more of the voting power outstanding
before the issuance for less than the greater of book or market value of the
stock.

The Company's right to exercise the Put is contingent upon obtaining the
Shareholder Approval by June 30, 2001. The Company will use the $3,000,000 of
proceeds which it expects to receive from the sale of the Put Notes for general
business purposes and the expansion of its manufacturing operations. The Company
believes that the sale of the Put Notes is the most expedient method by which
the Company can raise capital for these purposes, as compared to other sources
of debt and equity financing.

The Company is presently relying on the $4,100,000 which it has already
received from the sale of the Initial Notes and the additional $3,000,000 which
it expects to receive from the sale of the Put Notes in order to meet its
anticipated working capital needs. If the Approval is not obtained by June 30,
2001, the Company will not be able to exercise the Put, thereby losing the
opportunity to obtain this additional $3,000,000. Therefore, failure to obtain
the Approval will delay expansion of the Company's manufacturing operations
indefinitely until such time as the Company is able to secure other debt or
equity financing on satisfactory terms, if such are available.

In addition, if the Company fails to obtain the Approval by June 30, 2001,
the holders of Initial Notes would have the option to require the Company to
redeem their currently outstanding shares. It is unlikely that the Company would
have sufficient cash to redeem the Initial Notes if required to do so. In light
of the foregoing, the failure to obtain the Approval could deplete all of the
Company's available cash and thus materially impair the ability of the Company
to continue to operate its business.

The following is a summary of the terms and conditions of the Notes and the
Warrants.

INTEREST

The holders of the Notes are paid interest at a rate of five percent (5%)
per annum of the original principal amount, payable quarterly. The Notes are
convertible, in whole or in part, into that number of shares of Common Stock
equal to the original principal amount of the Note, plus accrued and unpaid
interest thereon, divided by the Conversion Price, as defined below.

CONVERSION

Subject to the restrictions discussed below, any holder of Notes has the
right at any time to convert, in whole or in part, Notes into a number of shares
of Common Stock equal to the original principal amount plus accrued and unpaid
interest on such Notes divided by the Conversion Price. The Conversion Price
means, at the option of the holder, (i) the closing prices of the Company's
Common Stock on the last trading day immediately preceding the date of the
initial issuance of the shares of Initial Notes; or (ii) eighty percent (80%) of
the average of the three lowest Closing Bid Prices for the sixty (60) trading
days immediately preceding the conversion of the applicable Notes or (iii) $.25.
Therefore, it is likely that the Notes will be converted to Common Stock at
Conversion Price which is below the prevailing market price of the Common Stock
at the time of the conversion.

The exact number of shares of Common Stock into which the Notes may
ultimately be convertible will vary over time as the result of ongoing changes
in the trading price of the Company's Common Stock. Decreases in the trading
price of the Company's Common Stock will cause an increase in the number of
shares of Common Stock issuable upon conversion. The maximum number of shares of
Common Stock issuable upon conversion of the Notes, together with the shares of
Common Stock issuable upon exercise of the Warrants, cannot exceed 3,774,541
shares under Nasdaq Rule 4310(c)(25)(H) prior to the receipt of the Approval.
This number of shares represents 19.9% of the Company's outstanding Common Stock
as of the date the Initial Shares and the Initial Warrants were issued. However,
after the Approval is obtained, there will be no cap on the number of common
shares into which the shares of Series A Preferred Stock can be converted. If
the Notes are converted at the Conversion Price of $.25, the holders thereof
would receive 28,400,000 shares of Common Stock. If the Warrants were also
exercised in full, an

additional 14,200,000 shares of Common Stock would be issued. Therefore, after
the Approval is obtained, it is possible that significant additional dilution of
existing shareholders' interests may occur. The following consequences could
result:

- If the market price of the Company's Common Stock declines, thereby
proportionately increasing the number of shares of Common Stock
issuable upon conversion of the Notes, an increasing downward pressure
on the market price of the Common Stock might result (sometimes
referred to as a downward "spiral" effect).

- The dilution caused by conversion of Notes and sale of the underlying
shares could also cause downward pressure on the market price of the
Common Stock.

- Once downward pressure is placed on the market price of the Company's
stock, this pressure could encourage short sales by holders of Notes
and others, thus placing further downward pressure on the price of the
Common Stock.

- The conversion of Notes would dilute the book value and earnings per
share of Common Stock held by existing shareholders of the Company.

In the event the Company declares any dividend or distribution on its
Common Stock, or splits, combines or reclassifies its Common Stock, then the
Conversion Price will be proportionately adjusted so that each holder of Notes
will be entitled to receive the same number of shares of Common Stock upon
conversion of Notes as though such conversion occurred prior to the event
requiring the adjustment. Similarly, if the Company merges with another entity
or sells substantially all of its assets, the holders of the Notes shall be
entitled to convert the Notes into the consideration (whether it consists of
stock, other securities and/or property) which that holder would have been
entitled to receive had such holder converted its holdings of Notes to Common
Stock immediately prior to such merger or asset sale. The Conversion Price will
also be adjusted pursuant to formula (thereby entitling the holders of the Notes
to receive additional shares of Common Stock upon conversion) in the event the
Company makes certain additional issuances of Common Stock.

REDEMPTION

From and after the effective date of a Registration Statement relating to
the underlying shares, upon receiving a Notice of Conversion, the Notes which
are the subject of the Conversion Notice are redeemable at the option of the
Company at a price equal to 125% of the principal amount of the applicable Note,
plus accrued and unpaid interest thereon.

The Company is required to redeem the Notes after the occurrence of certain
triggering events, including, among other things:

- Failure of the Company to pay interest when required;

- Material breaches of the Company's agreements with purchasers of the
Notes, including failure to register the Common Stock issuable upon
conversion of the Notes and failure to maintain the effectiveness of
any such registration;

- Failure to maintain a Nasdaq National Market System or Nasdaq SmallCap
Market listing for the Company's Common Stock; and

- Failure to deliver Common Stock certificates in a timely fashion after
the conversion of Notes.

SECURITY

The Notes are secured by a security interest ("Security Interest") granted
by the Company in favor of the holders of the Notes, regarding substantially all
of the assets of the Company, including its patents, trademarks, certificates
(including Federal Aviation Administration Type Certificate Number A49NM),
instruments, accounts, credits, real estate, inventory, books and records. In
the event of an Event of Default regarding the Notes or the Subscription
Agreement under which the Notes were issued, which continues past the applicable
cure period, the holders thereof have to right to foreclose upon the Security
Interest and to liquidate such and apply such proceeds to satisfaction of the
obligations under the Notes, including all accrued and unpaid interest to and
including the date of payment to any such holder. In the event the assets of the
Company available for distribution to the holders of Notes are insufficient to
permit payment in full of all amounts owing to the Note holders, then all of
such assets shall be distributed proportionately among the holders of the Notes
to the exclusion of the holders of Common Stock or any other class of stock of
the Company.

The Board of Directors has unanimously approved, and recommends that the
shareholders authorize and ratify: (i) the issuance of the Notes and the
Warrants, (ii) the issuance of that number of shares of the Company's Common
Stock issuable upon conversion of the Notes approved for issuance hereby, and
(iii) the issuance of the maximum number of shares of Common Stock issuable upon
exercise of the Warrants in accordance with the terms thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 3

PROPOSAL 4

APPROVAL OF THE COMPANY'S
2001 STOCK OPTION PLAN

On April 9, 2001, the Board of Directors authorized the adoption of the
2001 Stock Option Plan. The proposal to ratify the 2001 Stock Option Plan is
recommended by the Board of Directors because it considers it to be in the best
interests of the Company and its stockholders. The Stock Option Plan is
designed to serve as an incentive to directors, officers, and key employees and
contractors to focus their services on achieving superior earnings performance
and increasing the value of the stockholders' proprietary interest in the
Company. A maximum of 1,500,000 aggregate shares are reserved for issuance
under the Stock Option Plan. The Stock Option Plan vests broad discretionary
power in the Plan Committee, including the power to (i) select eligible
optionees to be granted stock options, (ii) set the option exercise price
(subject to certain restrictions), (iii) establish the duration of each option
(not to exceed ten years), (iv) specify the method of exercise, and (v)
designate the medium and time of payment. The Stock Option Plan will terminate
on April 8, 2011, unless sooner terminated by the Board. No options may be
granted after termination of the Stock Option Plan, although Options outstanding
at the time of termination will continue to be exercisable in accordance with
their terms. The issuance of shares of Common Stock upon the exercise of
options granted under the Stock Option Plan will dilute the voting power of
current stockholders. The extent of dilution will depend on the number of
options exercised and difference between the option exercise price and the
market price for the Common Stock at the time of exercise.

The foregoing summary of the Stock Option Plan is qualified in its
entirety by the terms of the plan, which is available for review at the
principal office of the Company. The Board of Directors believes that any
effect the Stock Option Plan will have in diluting the voting power of current
stockholders will be exceeded by the effect of the plan to attract and retain
the services of experienced and knowledgeable directors, officers, employees and
other eligible service-providers who will contribute to the profitability and
value of the current stockholders' holdings in the Company.

The Board of Directors has unanimously approved and recommends that the
shareholders authorize and ratify the 2001 Stock Option Plan.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 4.

PROPOSAL 5

RATIFICATION OF SELECTION OF AUDITORS

The Board of Directors has authorized the firm of Ernst & Young LLP,
independent public accountants, to serve as auditors for the fiscal year ending
December 31, 2001. A representative of Ernst & Young LLP will be present at the
Annual Meeting and will have the opportunity to make a statement if he or she
desires to do so. Further, the representative of Ernst & Young LLP will be
available to respond to appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF ERNST AND YOUNG AS THE AUDITORS OF THE
COMPANY.

The Board of Directors does not know of any other matters which may come
before the Annual Meeting. However, if any other matter shall properly come
before the Annual Meeting, the proxy holders named in the proxy accompanying
this statement will have discretionary authority to vote all proxies in
accordance with their best judgment.

OTHER MATTERS

Applicable tax law requires that this change be approved by the
shareholders of the Company within twelve months of its adoption by the Board.

SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING

Any stockholder who wishes to present a proposal for consideration at the
annual meeting of stockholders to be held in 2002 must submit such proposal in
accordance with the rules promulgated by the Securities and Exchange Commission.
In order for a proposal to be included in the Company's proxy materials relating
to the 2002 Annual Meeting of Stockholders, the stockholder must submit such
proposal in writing to the Company so that it is received no later than January
5, 2002. Any stockholder proposal submitted with respect to the Company's 2002
Annual Meeting of Stockholders which proposal is received by the Company after
March 25, 2002 will be considered untimely for purposes of Rule 14a-4 and 14a-5
under the Exchange Act and the Company may vote against such proposal using its
discretionary voting authority as authorized by proxy.

ANNUAL REPORT TO SHAREHOLDERS

The Company's Annual Report for the fiscal year ended December 31,
2000 is being mailed to Shareholders along with this Proxy Statement. The
Annual Report is not to be considered part of the soliciting material.

By Order of the Board of Directors
Long Beach, California
May 4, 2001

APPENDIX A

ADVANCED AERODYNAMICS & STRUCTURES, INC.
AUDIT COMMITTEE CHARTER

The Audit Committee ("Committee") is a committee of the Board of Directors
(the "Board") of Advanced Aerodynamics & Structures, Inc. (the "Company"). Its
primary function is to assist the Board in fulfilling the Board's oversight
responsibilities by reviewing (1) financial information that will be provided to
the shareholders and others, (2) systems of internal controls established by
management and the Board and (3) the audit process.

As long as the Company has securities listed on the Nasdaq National Market
System and SmallCap Market and is a small business filer reporting under
Regulation S-B promulgated by the Securities and Exchange Commission ("SEC"),
the Committee will be made up of at least two (2) members, a majority of which
will be independent directors as defined by the rules of Nasdaq. Committee
members shall be appointed by, and shall serve at the pleasure of, the Board.

The Committee is expected to fulfill the following responsibilities:

General
- -------

1. Provide an open avenue of communication between the outside auditor and the
Board.

2. Consider and review, with the outside auditor, the adequacy of the Company's
internal controls including computerized information system controls and
security.

3. Inquire of management and the outside auditor about significant risks or
exposures and assess the steps management has taken to minimize such risk to
the Company.

4. Prepare a letter for inclusion in the annual report that describes the
Committee's composition and responsibilities, and how they were discharged.

Oversight of the Outside Auditor
- --------------------------------

5. Make recommendations to the Board with regard to the nomination, review,
compensation and discharge of the outside auditors. The outside auditor will
be ultimately accountable to the Committee and the Board.

6. Make recommendations to the Board with regard to appropriate action to be
taken to oversee the independence of the outside auditor.

7. Ensure its receipt from the outside auditor of a formal written statement
delineating all relationships between the outside auditor and the Company
and actively discuss with the outside auditor any disclosed relationships or
services that may impact the objectivity and independence of the outside
auditor.

Annual Audit and Interim Statements
- -----------------------------------

8. Consider, in consultation with the outside auditor, the audit scope and
plan of the outside auditor.

9. Consider, with management and the outside auditor, the rationale for
employing audit firms other than the principal outside auditor.

10. Review, with the outside auditor, the coordination of audit efforts to
ensure completeness of coverage, reduction of redundant efforts and the
effective use of audit resources.

11. Review, with management and the outside auditor, at the completion of the
annual audit:

(a) The Company's annual financial statements and related footnotes.
(b) The outside auditor's audit of the financial statements and report
thereon.
(c) Any significant changes required in the outside auditor's audit plan.
(d) Any serious difficulties or disputes with management encountered
during the course of the audit.
(e) Other matters related to the conduct of the audit that are to be
communicated to the Committee under generally accepted auditing
standards.

12. Review with management and the outside auditor interim financial statements
before they are filed with the SEC or other regulators.

The Committee shall have the power to conduct or authorize investigations
into any matters within the Committee's scope of responsibilities. The
Committee shall be empowered to retain independent counsel, accountants or
others to assist it in the conduct of any investigation.

The Committee shall meet at least four (4) times per year or more
frequently as circumstances require. The Committee may ask members of
management or others to attend the meeting and provide pertinent information, as
necessary. The Committee will review and reassess the adequacy of this charter
annually.

The Committee will perform such other functions as assigned by law, the
Company's certificate of incorporation or bylaws, or the Board. The duties and
responsibilities of a Committee member are in addition to those duties set out
for a member of the Board.

Dated: April 3, 2000 /s/ Carl Chen
----------------------------------
Carl Chen, President

ADVANCED AERODYNAMICS AND STRUCTURES, INC.
3205 LAKEWOOD BLVD.
LONG BEACH, CALIFORNIA 90808

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

The undersigned, as owner of ________ shares of Class A Common Stock of
Advanced Aerodynamics and Structures, Inc., a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Proxy Statement and the notice of
the shareholders meeting to be held on June 1, 2001, at 10:00 a.m. local time,
at 3205 Lakewood Blvd., Long Beach, CA 92808, and hereby further revokes all
previous proxies and appoints Dr. Carl Chen or David Turner, or either of them,
as proxy of the undersigned at said meeting and any adjournments thereof with
the same effect as if the undersigned were present and voting the shares.

(1) For the election of the following persons as directors of the Company to
serve until the next annual meeting of shareholders or until their
respective successors shall have been elected and qualified:

Carl Chen, Ph.D., C.M. Cheng,
James A. Lovell, S.B. Lai, Ph.D.,
Roy H. Norris, Hon. Robert P. Kaplan

[ ] AUTHORITY GRANTED to [ ] AUTHORITY WITHHELD to vote
vote for nominees listed for all nominees listed above.
above, except as indicated
to the contrary below.

(INSTRUCTION: TO VOTE AGAINST ANY NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)

---------------------------------------------------------------------

(2) The ratification of the authorization of 115,000,000 additional shares of
Class A Common Stock of the Company.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(3) The authorization and ratification of: (i) the issuance and sale in
private placements of up to $7,100,000 of the Company's 5% secured
convertible notes (the "Notes"), and (ii) the issuance of that number of
shares of the Company's Class A Common Stock, no par value ("Common
Stock"), issuable upon conversion of the Notes being approved for issuance,
based on the conversion formula set forth in the Notes.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(4) The approval of our 2001 Stock Option Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(5) The ratification of the selection of Ernst & Young LLP to serve as auditors
of the Company for the fiscal year ending December 31, 2001.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(6) In their discretion upon such other matters as may properly come before the
meeting and any adjournments thereof.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS YOU HAVE INDICATED ABOVE.
IF NO INDICATION HAS BEEN MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED FOR THE ABOVE NOMINEES AND IN FAVOR OF SUCH PROPOSALS, AND AS SAID PROXY
DEEMS ADVISABLE ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Dated: __________________________, 2001

Sign exactly as your name appears on your share
certificate. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title. If more than one
trustee, all should sign. All joint owners
should sign. If a corporation, sign in full
corporation name by president or other
authorized officer. If a partnership, sign in
partnership name by authorized person. Persons
signing in a fiduciary capacity should indicate
their full title in such capacity .

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

ADVANCED AERODYNAMICS AND STRUCTURES, INC.
3205 LAKEWOOD BLVD.
LONG BEACH, CALIFORNIA 90808

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

The undersigned, as owner of ________ shares of Class B Common Stock of
Advanced Aerodynamics and Structures, Inc., a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Proxy Statement and the notice of
the shareholders meeting to be held on June 1, 2001, at 10:00 a.m. local time,
at 3205 Lakewood Blvd., Long Beach, CA 92808, and hereby further revokes all
previous proxies and appoints Dr. Carl Chen or David Turner, or either of them,
as proxy of the undersigned at said meeting and any adjournments thereof with
the same effect as if the undersigned were present and voting the shares.

Carl Chen, Ph.D., C.M. Cheng,
James A. Lovell, S.B. Lai, Ph.D.,
Roy H. Norris, Hon. Robert P. Kaplan

[ ] AUTHORITY GRANTED to [ ] AUTHORITY WITHHELD to vote
vote for nominees listed for all nominees listed above.
above, except as indicated
to the contrary below.

(INSTRUCTION: TO VOTE AGAINST ANY NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)

---------------------------------------------------------------------

(2) The ratification of the authorization of 115,000,000 additional shares of
Class A Common Stock of the Company.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(4) The approval of our 2001 Stock Option Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(5) The ratification of the selection of Ernst & Young LLP to serve as auditors
of the Company for the fiscal year ending December 31, 2001.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(6) In their discretion upon such other matters as may properly come before the
meeting and any adjournments thereof.

Dated: __________________________, 2001

Sign exactly as your name appears on your share
certificate. When signing as attorney, executor,
administrator, trustee or guardian, please give
full title. If more than one trustee, all should
sign. All joint owners should sign. If a
corporation, sign in full corporation name by
president or other authorized officer. If a
partnership, sign in partnership name by
authorized person. Persons signing in a
fiduciary capacity should indicate their full
title in such capacity.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

ADVANCED AERODYNAMICS AND STRUCTURES, INC.
3205 LAKEWOOD BLVD.
LONG BEACH, CALIFORNIA 90808

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

The undersigned, as owner of ________ shares of Class E Common Stock of
Advanced Aerodynamics and Structures, Inc., a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Proxy Statement and the notice of
the shareholders meeting to be held on June 1, 2001, at 10:00 a.m. local time,
at 3205 Lakewood Blvd., Long Beach, CA 92808, and hereby further revokes all
previous proxies and appoints Dr. Carl Chen or David Turner, or either of them,
as proxy of the undersigned at said meeting and any adjournments thereof with
the same effect as if the undersigned were present and voting the shares.

Carl Chen, Ph.D., C.M. Cheng,
James A. Lovell, S.B. Lai, Ph.D.,
Roy H. Norris, Hon. Robert P. Kaplan

[ ] AUTHORITY GRANTED to [ ] AUTHORITY WITHHELD to vote
vote for nominees listed for all nominees listed above.
above, except as indicated
to the contrary below.

(INSTRUCTION: TO VOTE AGAINST ANY NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)

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(2) The ratification of the authorization of 115,000,000 additional shares of
Class A Common Stock of the Company.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(4) The approval of our 2001 Stock Option Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(5) The ratification of the selection of Ernst & Young LLP to serve as auditors
of the Company for the fiscal year ending December 31, 2001.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(6) In their discretion upon such other matters as may properly come before the
meeting and any adjournments thereof.

Dated: __________________________, 2001

Sign exactly as your name appears on your share
certificate. When signing as attorney, executor,
administrator, trustee or guardian, please give
full title. If more than one trustee, all should
sign. All joint owners should sign. If a
corporation, sign in full corporation name by
president or other authorized officer. If a
partnership, sign in partnership name by
authorized person. Persons signing in a
fiduciary capacity should indicate their full
title in such capacity.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.