Atlantic Systems Group Inc. Will Not Complete Major Customer Order by Aug. 31, 2002.

Business Editors

FREDERICTON, New Brunswick--(BUSINESS WIRE)--Aug. 29, 2002

Atlantic Systems Group Inc. ("ASG") (TSX Venture Exchange:YGT) announced today that it will not complete a firm order with a major customer by August 31, 2002.

According to Don Reid, ASG's President and Chief Executive Officer, "Contract negotiations are continuing with a major customer but many issues remain unresolved and it is not feasible that we will conclude an agreement by the end of August." As more fully described in ASG's August 14, 2002 press release with respect to the amended financing facility with Ineo Inc. ("Ineo") entered into on October 15, 2001 (the "Facility"), ASG is obligated to reduce the conversion price on the entire Facility to $0.01 per common share from $0.16 per common share in the event that ASG is unable to complete a firm order without contingencies from a major customer by August 31, 2002.

At a conversion price of $.01, the convertible debentures held by Ineo as at the date hereof would entitle it to acquire approximately 98% of the common shares of ASG. If the balance of the subscription receipts issued under the Facility are exercised, Ineo would be entitled to acquire approximately 99% of the common shares of ASG. "We are obviously frustrated and concerned about the status of our customer contract negotiations at the same time as we are highly uncertain about the outlook for our financial resources," said Mr. Reid. "Without an agreement of additional capital from Ineo or other investors, ASG will be unable to continue to fund its corporate obligations. We are reviewing all of the options available to ASG and cannot rule out foreclosure and bankruptcy proceedings." ASG also announced that Roy Nicholl, VP of Security Solutions has resigned from the board of directors of ASG. Additionally, Mr. Nicholl has taken a leave of absence from his employment position pending satisfactory renegotiation of his employment contract.

About ASG Technologies

ASG Technologies is a software developer of core network solutions, specifically designed for Service Providers and telecom OEMs. ASG's principal product, Passwerks, is a network access control and security (NAC&S) solution for network elements that provides single sign-on authentication; role based network wide access control; dynamic account log-on to selected network elements; encrypted transfer; event driven audit capabilities and centralized administration. Headquartered in Fredericton, NB, Canada, ASG has offices in Raleigh, North Carolina, The Netherlands and Great Britain.

The common shares of ASG are listed and posted for trading on the Canadian Venture Exchange (TSX Venture Exchange: YGT). There were 25,183,048 common shares outstanding as at June 18, 2002.

For more information on ASG, call 506-460-5400, 1-866-PASSWERKS or visit the Company's web site at www.ASGTechnologies.com.

NOTE: This press release may contain forward-looking statements, including statements regarding the business and anticipated financial performance of ASG Technologies, which involve risks and uncertainties. These risks and uncertainties may cause ASG Technologies' actual results to differ materially from those contemplated by the forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures, the growth rate of the Internet and telecommunications concerns, constantly changing technology and market acceptance of the company's products and services. Investors are also directed to consider the other risks and uncertainties discussed in ASG Technologies required financial statements and filings. All other companies and products listed herein may be trademarks or registered trademarks of their respective holders. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.