News Story

FOR IMMEDIATE RELEASE

VillageEDOCS Reports 7% Growth in 2008

SANTA ANA, CA, APRIL 2, 2009—VillageEDOCS, Inc. (OTCBB: VEDO), a Solution as a Service company, which is the largest segment of the Software as a Service (SaaS) market, reported 2008 revenue of $15,176,393, a 7% increase over 2007. In addition, the Company reported improvements in operating expenses, which were down 9% compared to 2007, and retirement of $539,000 in accrued expenses and notes payable debt, it was announced today by Mason Conner, Chief Executive Officer.

2008 Highlights:

• Acquired Questys Solutions (2008 revenue on a pro forma basis: $2.7 million), thereby adding new products and SaaS solutions for document and content management, automated data capture, electronic agenda management, and business process workflow;
• Although we incurred new current and long term debt of approximately $1.1 million in connection with our acquisition of Questys Solutions during 2008 we used cash flows generated by our operations to retire $539,000 in accrued expenses and notes payable debt, $322,000 of which existed as of December 31, 2007, and $172,000 of which was related to management restructuring;
• Record consolidated net revenue of $15,176,393 for 2008, up 7% from 2007;
• GSI business unit saw a 13% increase in net income to $1,134,016 for 2008, while the loss from the holding company decreased 27%, or $952,688;
• Recently acquired Questys Solutions business unit (acquired on August 1, 2008) contributed $979,553 in revenue for 2008;
• Operating expenses during 2008 decreased by 9% over 2007, with operating expenses at the holding company were down 34%;
• Consolidated net loss for 2008 was $616,242, a 63% improvement from the $1,659,806 reported for 2007;
• Deloitte & Touche honored us twice during 2008. They ranked VillageEDOCS 14th on their Technology Fast 50 list of the fastest growing companies in Orange County, based on a five year growth rate of 653%. In addition, we were also included in Deloitte’s prestigious 2008 Technology Fast 500 ranking of the fastest growing companies in North America, where VillageEDOCS was ranked 267th; and
• Adjusted Earnings of $982,745 (as defined below) resulted from an increase of $331,720 over 2007 (see reconciliation that follows).

“Our efforts to focus on stable growth, completing an acquisition, debt repayment, and administrative cost containment in the face of the past year’s challenging economic environment continue to be key elements of our strategy as we weather the continuing storm ,” stated Mr. Conner.

For the year ended December 31, 2008, VillageEDOCS had record consolidated net revenue of $15,176,393, a 7% increase over net revenue for the prior year of $14,180,658. Operating loss for 2008 decreased to $463,886, compared to an operating loss of $1,680,626 for 2007, an improvement of $1,216,740. Net loss for 2008 was $616,242, compared with a net loss of $1,659,806 for 2007.

Basic and diluted loss per share for 2008 and 2007 was $(0.00) and $(0.01), respectively, on weighted average shares of 162,595,571 and 150,218,437, respectively.

The net loss for 2008 of $616,242 is after the effect of $843,632 of expense related to non-cash depreciation and amortization charges, as well as $298,593 of expense related to non-cash stock option vesting charges, $281,905 of loss related to interest expense, and a $12,198 provision for income taxes.

The revenue growth in 2008 was driven by an increase in recurring revenue from our government accounting solutions segment, as well as a $979,553 contribution from our Questys Solutions, Inc. (QSI) business unit, which we acquired effective August 1, 2008.

“We continue to work to align each business unit around shared goals and performance targets. We are also striving to maximize cross-selling activities and we are devoting strategic product management and technical resources both to strengthening the integration of our existing products and services and to developing new products and services that will allow us to offer our clients powerful new solutions comprised of the best that each of our business units has to offer,” Mr. Conner said.

About VillageEDOCS, Inc.
VillageEDOCS, Inc., through its MessageVision Communications and Collaboration Platform, is a leading provider of comprehensive business-to-business solutions which include VillageFax information delivery services for
organizations with mission critical needs, including major corporations, government agencies and non-profit organizations. Advanced electronic document/content management, automated data capture and business process workflow solutions are presented through the platform via Questys CMx and WFx, which serves a variety of markets in the U.S. and abroad. The platform further delivers enhanced voice and data delivery services to mass markets through its GoSolo unified messaging services. Accounting, tax, utility and billing solutions are presented for county and local governments via its TBS municipal management services. For further information on VillageEDOCS, visit our website at www.villageedocs.com.

Cautionary Statement Regarding Forward-Looking Information
All statements in this press release that do not directly and exclusively relate to historical facts constitute forwardlooking 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 2009, are forwardlooking 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.

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 principles 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 2009 and 2010 are expected to be at least as material as they were during 2008.