News Story

FOR IMMEDIATE RELEASE

VillageEDOCS Sees Continuing Strong Growth In Revenues And Operating Income, With 2007 Revenues Expected To Grow 25%

EBITDA To Increase Approximately 80-100%, Management Tells Analysts

NEW YORK, Oct. 18, 2007—VillageEDOCS, Inc. (OTCBB:VEDO), a rapidly growing Software as a Service company providing proprietary on-demand outsource business solutions, told analysts and brokers in meetings today that it is “experiencing a continuing strong growth in revenues and operating income, a trend which is accelerating and should create operating records for 2007 and again in 2008,” according to Mason Conner, Chief Executive Officer.

"Revenues this year should rise at least 25% to the $16-17 million level, excluding the $3.5 million potential contribution to be made by the pending acquisition of Questys Solutions," Mr. Conner said.  "Indications are that 2007 EBITDA should rise to the range of $800,000 to $1,000,000 from last year's $500,000, with the major part of this coming in the second half when our Tailored Business Systems unit records the bulk of its profits as its municipal government accounting and billing services clients enter the annual property tax season," he said.

Mr. Conner told analysts and brokers that "the company will cross over to bottom line profit in the second half of 2008 based on planned organic growth and net income from Questys Solutions.” He noted that the company's EBITDA forecasts, a non-GAAP financial measure, include non-cash depreciation and amortization charges as well as SFAS 123(R) stock option vesting expenses and other charges which are expected to total approximately $2 million in 2007, and that each of the company's four subsidiaries is profitable on a stand alone basis, as is Questys, whose acquisition is subject to due diligence and financing requirements.

Mr. Conner pointed out that "Software as a Service as a category is among the fastest growing segments of the software industry, and lends itself to the roll up of multiple companies providing complementary services.  We intend to continue to build out and populate our platform of non competing business information delivery systems by acquiring synergistic companies with capabilities that will enhance the breadth of our product offerings and provide excellent cross selling opportunities.  Our current and growing client roster includes some 1,200 companies, with recurrent revenue running some 80% annually, with clients running the gamut from county and city governments to such industrial and financial institutions as General Electric, Bridgestone-Firestone, McKesson, and Primerica.”

About VillageEDOCS

VillageEDOCS, through its MessageVision subsidiary, is a leading provider of comprehensive business information delivery services and products for organizations with mission-critical needs, including major corporations, government agencies and non-profit organizations.  Through its Tailored Business Systems subsidiary, VillageEDOCS provides accounting and billing solutions for county and local governments.  Through its Resolutions subsidiary, VillageEDOCS provides products for document management, document imaging, electronic forms, document archiving, and e-mail archiving.  Through its GoSolutions subsidiary, VillageEDOCS provides enhanced voice and data delivery services.  For further information, visit our website at www.villageedocs.com.

Non-GAAP Financial Measure:  Adjusted EBITDA

We believe “Adjusted EBITDA”, which is a non-GAAP financial measure, provides useful information to investors and management by excluding certain income, expenses, and gains and losses that may not be indicative of our core operating and financial reports.  We believe that “Adjusted EBITDA” is a useful performance measure because certain items included in the calculation of net income (loss) may either mask or exaggerate trends in our ongoing operating performance.  We use “Adjusted EBITDA” on an ongoing basis to track and assess our financial performance.  You, however, should not consider “Adjusted EBITDA” in isolation or as a substitute for net income (loss) or any other measure for determining our operating performance that is calculated in accordance with accounting principals generally accepted in the United States of America (“U.S. GAAP,” “GAAP”).  “Adjusted EBITDA” is not necessarily comparable to similarly titled measures employed by other companies.  We expect future Adjusted EBITDA to vary significantly from anticipated future net income (loss) because depreciation, amortization, interest, tax, and stock option vesting expenses during 2007 and 2008 are expected to be at least as material as they were during 2006.

Cautionary Statement Regarding Forward-Looking Information

All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Statements made in this press release, including, without limitation, those relating to our belief about the benefits the Company has derived, or may derive, from pursuing its acquisition strategy or from acquiring GoSolutions or from new management personnel or consultants, and our expectations regarding future operating results, including such for the remainder of 2007 or 2008, are forward-looking statements. These statements, and other forward looking statements in this press release, represent the Company’s plans, intentions, expectations and belief and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected or expressed herein.  These include, without limitation, risks associated with acquisitions, including Questys Solutions, such as the inability to complete a transaction or to assimilate and integrate new operations and retain key personnel, uncertainties in the market, competition, legal, regulatory initiatives, success of marketing efforts, availability, terms and deployment of capital, personnel risks, and other risks detailed in the Company’s SEC reports, of which many are beyond the control of the Company.  Trading in the Company's common stock is limited, and marketability of the stock is restricted by penny stock regulations and the fact that our common stock is traded on the OTCBB.  The Company does not presently qualify, and may never qualify, to be listed or quoted on any exchange or other market. The Company assumes no obligation to update or alter the information in this press release.  Investors are cautioned not to put undue reliance on any forward-looking statements. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 21E of the Exchange Act.