News Story

FOR IMMEDIATE RELEASE

VillageEDOCS Reports Q1 Revenues Up Modestly; Emphasis On Cost Controls Reduces Quarterly Loss And Debt

SANTA ANA, CA, May 16, 2008—VillageEDOCS, Inc. (OTCBB:VEDO), a Solution as a Service company, which is the largest segment of the Software as a Service (SaaS) market, today announced financial results for the quarter ended March 31, 2008.

2008 First Quarter Highlights:

“We are pleased with our first quarter results for 2008. Although we sold our Resolutions business unit in 2007, which resulted in lower consolidated revenues, we are particularly satisfied with the significant sales increase of our TBS business unit, which showed a 9% increase over the same period a year ago,” said Mason Conner, President and Chief Executive Officer of VillageEDOCS, Inc.

“We intend to continue our focus on obtaining stronger internal growth from sales of higher margin products and services at each of our operating subsidiaries, as well as by continuing to acquire companies that consistently generate net income and positive cash flows. We believe that this strategy offers the best opportunity for our operations to generate positive operating income and cash flows from operations and to achieve positive net income for the Company as a whole,” Mr. Conner said. “Our acquisition strategy has two objectives--to acquire enterprises that fulfill our identified strategic technological core competencies and to acquire companies that assist us in penetrating our target market segments of financial services, healthcare, manufacturing, and local government.”

For the first quarter ended March 31, 2008, VillageEDOCS had consolidated net revenue of $3,277,985 a 1% increase over net revenue for 2007 of $3,258,549. Revenue increased 9% at TBS due to increases in revenue from services and printing. These increases were partially offset by decreases in software sales which resulted in part from the Company’s strategy to promote online, usage-based services rather than single unit product sales. Revenue increased 1% at GSI due to increases in revenue from user subscription agreements and professional service fees revenue, which were offset by decreases in sales to corporate clients. Revenue decreased 11% at MVI due to a decrease in inbound revenue as a result of mortgage industry customer attrition and, to a lesser extent, a reduction in supplemental services revenue.

Net loss for the three months ended March 31, 2008 was $494,835, or $0.00 per share, compared to a net loss of $502,762, or $0.00 per share, for the three months ended March 31, 2007 on weighted average shares of 150,218,437 and 147,409,940, respectively. Consolidated operating expenses during the 2008 quarter were 72% of sales compared to 81% of sales in the 2007 quarter.

Included in the first quarter 2008 net loss was $251,153 of loss from non-cash depreciation and amortization charges and non-cash stock option vesting charges (2007: $463,066). Adjusted Earnings (as defined below) of $7,337 for the three months ended March 31, 2008, compares with Adjusted Earnings of $(65,354) in the same period a year ago (see reconciliation that follows).

During the first quarter of 2008, total operating expenses were $2,357,652, a decrease of $282,427 from the prior year period. The overall decrease resulted from decreases at each of the Company’s operating units plus a 25% reduction in operating expenses of the holding company. Consolidated operating expenses during the first quarter of 2008 were 72% of sales compared to 81% of sales in the 2007 quarter.

About VillageEDOCS, Inc.
VillageEDOCS is focused on the Content, Communication and Collaboration segment of the Software as a Service (SaaS) market. Through its MessageVision (MVI) subsidiary, VillageEDOCS 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 (TBS) subsidiary, VillageEDOCS provides accounting and billing solutions for county and local governments. Through its GoSolutions (GSI) subsidiary, VillageEDOCS provides enhanced voice and data delivery services. For further information, visit the Company’s website at www.villageedocs.com.

Non-GAAP Financial Measure: Adjusted Earnings
We believe “Adjusted Earnings”, 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 results. We believe that “Adjusted Earnings” 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 expect to use “Adjusted Earnings” on an ongoing basis to track and assess our financial performance. You, however, should not consider “Adjusted Earnings” 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 Earnings” is not necessarily comparable to similarly titled measures employed by other companies. We expect future Adjusted Earnings to vary significantly from anticipated future net income (loss) because depreciation, amortization, interest, tax, equity compensation, and stock option vesting expenses during 2008 and 2009 are expected to be at least as material as they were during 2007.

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 new management personnel or consultants, and our expectations regarding future operating results, including such for the remainder of 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, 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.