Company News

FOR IMMEDIATE RELEASE

VillageEDOCS Reports Record Net Profit On 19% Revenue Increase In Third Quarter Ended September 30, 2008

SANTA ANA, CA, NOVEMBER 18, 2008—VillageEDOCS, Inc. (OTCBB: VEDO), a Solution as a Service (SaaS) company, which is the largest segment of the Software as a Service (SaaS) market, achieved a record net profit of $318,800, on 19% growth in revenue to a record $4.27 million for the third quarter ended September 30, 2008, it was announced today by Mason Conner, Chief Executive Officer.

2008 Third Quarter/Nine Months Highlights:

“We are pleased to report double digit growth in third quarter consolidated net revenue. Although the second half is typically the stronger one, we are particularly gratified with achieving a record net profit for Q3 as a result of our continued focus on growth amid a deteriorating economic environment,” stated Mr. Conner.

For the third quarter ended September 30, 2008, VillageEDOCS had record consolidated net revenue of $4,273,114, a 19% increase over net revenue for the prior year quarter of $3,582,554. Operating income in the 2008 third quarter increased to $274,548, compared with an operating loss of $50,925 in the year ago period. Net income for the 2008 third quarter was $318,800, compared with a net loss of $43,269 for the three months ended September 30, 2007.

Basic earnings (loss) per share for the three months ended September 30, 2008 and 2007 was $0.00 in each of the respective periods on weighted average shares of 167,118,739 and 151,187,580, respectively. Diluted earnings (loss) per share for the three months ended September 30, 2008 and 2007 was $0.00 in each of the respective periods on weighted average shares of 201,883,203 and 151,187,580, respectively.

The third quarter net income of $318,800 is after the effect of $188,378 of expense, related to non-cash depreciation and amortization charges, as well as $98,604 of expense related to non-cash stock option vesting charges and $53,667 of loss related to amortization of debt discount and debt issuance costs.

Strong revenue growth in the 2008 third quarter was driven by an increase in recurring revenue among two of our operating business units, as well as a $447,408 contribution from our Questys Solutions, Inc. (QSI) business unit, which we acquired effective August 1, 2008.

“With a client roster of more than 1,400, we continue to focus on balanced growth both internally as well as through selective synergistic acquisitions such as QSI. At the same time, we are continuing to emphasize and drive efficiency and effectiveness throughout our group of companies, and we are now beginning to feel the real impact of this having achieved net profitability in the third quarter, on 19% revenue growth,” Mr. Conner said.

“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,” he added.

For the nine months ended September 30, 2008, VillageEDOCS had consolidated net revenue of $10,965,907, an 8% increase over net revenue for the prior year period of $10,176,538. Total operating loss decreased 74% to $284,534 in the 2008 nine months, compared with an operating loss of $1,079,254 in the year ago nine month period. Net loss for the nine months ended September 30, 2008, decreased 67% to $332,700, or $0.00 per share (basic and diluted), compared with a net loss of $1,023,106, or $0.01 per share (basic and diluted), for the nine months ended September 30, 2007. Basic and diluted weighted average shares outstanding for the 2008 and 2007 nine month periods, were 157,606,078 and 149,380,374, respectively.

The 2008 nine months net loss of $332,700, is after the effect of $554,153 of expense related to non-cash depreciation and amortization charges, as well as $221,016 of expense related to non-cash stock option vesting charges and $143,111 of expense related to amortization of debt discount and debt issuance costs.

About VillageEDOCS, Inc.
VillageEDOCS, Inc., through its MessageVision subsidiary, is a leading provider of comprehensive business-to-business information delivery and document management 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 GoSolutions subsidiary, VillageEDOCS provides enhanced voice and data delivery services. Through its Questys Solutions subsidiary, VillageEDOCS provides advanced electronic document/content management and automated data capture solutions to a variety of markets in the U.S. and abroad. For further information, 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 2008, 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.