America Service Group Clarifies Telemedicine Initiatives.

BRENTWOOD, Tenn. -- America Service Group Inc. (NASDAQ:ASGR), through its operating subsidiaries, has more than 15 years of experience in utilizing telemedicine to provide healthcare services in correctional settings. However, as its current subsidiaries provide services only to the correctional healthcare market, the Company does not currently provide telemedicine services to any other segment of the population.

While the Company continues to enhance its telemedicine services for the correctional markets, it also believes telemedicine can be an effective, cost-efficient tool to provide certain medical services to underserved consumer populations. The Company believes that the experience of its operating subsidiaries makes it uniquely suited to bring these services to such populations. Therefore, the Company is currently exploring the possibility of expanding its provision of telemedicine services beyond correctional healthcare under the operating name of ASGR Clinical e-Health Solutions.

America Service Group Inc., based in Brentwood, Tennessee, is a leading provider of correctional healthcare services in the United States. America Service Group Inc., through its subsidiaries, provides a wide range of healthcare programs to government agencies for the medical care of inmates. More information about America Service Group can be found on the Company's website at www.asgr.com

Cautionary Statement

This press release contains "forward-looking" statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements in this release that are not historical facts, including statements about the Company's or management's beliefs and expectations, constitute forward-looking statements and may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes" or "intends" and similar words and phrases. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following:

* the Company's ability to retain existing client contracts and obtain new contracts at acceptable pricing levels;

* whether or not government agencies continue to privatize correctional healthcare services;

* risks arising from governmental budgetary pressures and funding;

* the possible effect of adverse publicity on the Company's business;

* increased competition for new contracts and renewals of existing contracts;

* risks arising from the possibility that the Company may be unable to collect accounts receivable or that accounts receivable collection may be delayed;

* the Company's ability to limit its exposure for catastrophic illnesses, injuries and medical malpractice claims in excess of amounts covered under contracts or insurance coverage;

* the Company's ability to maintain and continually develop information technology and clinical systems;

* the outcome or adverse development of pending litigation, including professional liability litigation;

* the Company's determination whether to repurchase shares under its stock repurchase program;

* risks arising from the possibility that the acquirer of certain assets of SPP cannot provide pharmaceuticals or related services at either a cost or service level sufficient to allow the Company to meet its contractual obligations with its customers without negatively impacting financial performance;

* the Company's dependence on key management and clinical personnel;

* risks arising from potential weaknesses or deficiencies in the Company's internal control over financial reporting;

* risks associated with the possibility that the Company may be unable to satisfy covenants under its credit facility;

* the risk that government entities (including the Company's government customers) may bring enforcement actions against, seek additional refunds from, or impose penalties on, the Company or its subsidiaries as a result of the matters investigated by the Audit Committee in prior years or the previous restatement of the Company's financial results;

* the Company's ability to expand its products beyond its traditional correctional health client base; and

* the risks arising from shareholder litigation.

A discussion of important factors and assumptions regarding certain statements and risks involved in an investment in the Company is contained in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this release. The Company assumes no obligations to update or revise them or provide reasons why actual results may differ.