---





U.S. SECURITIES AND
EXCHANGE COMMISSIONWashington, D.C. 20549
----------------------------

FORM 10-KSB

(X) ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

| | For
  the fiscal year ended December 31, 2004 | Commission
  File Number:  00031395
| | --------------------------------------------- | -----------------------------------

VillageEDOCS

(Name of Small Business Issuer in its
Charter)

| | California                                                       |  | 33-0668917                           | 
| | ---------------------------------------------------------------- |  | ------------------------------------ | 
| | ----------------------------------------------------------       |  | ----------------------------------   | 
| | (State or other jurisdiction of
  incorporation or organization) |  | (I.R.S. Employer Identification No.) | 
| |                                                                  |  |                                      | 
| | 14471 Chambers Road, Suite 105, Tustin,
  CA                     |  | 92780                                | 
| | ------------------------------------------------------------     |  | ----------------------------------   | 
| | (Address of principal executive
  offices)                       |  | (Zip Code)                           | 
| |                                                                  |  |                                      | 
| | Issuer's Telephone Number:                                       |  | (714)
  734-1030                     | 



Securities
registered under Section 12(b) of the Exchange Act:

| | Title of
  each class |  | Name of
  each exchange on which registered | 
| | --------------------- |  | ------------------------------------------- | 
| | NONE                  |  | N/A                                         | 
| |                       |  |                                             | 

Securities
registered under Section 12(g) of the Exchange Act:

Common Stock,  no par value(Title of each class)

Check whether
the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   YES(X)                              NO(
)

Check if
disclosure of delinquent filers in response to Item 405 of Regulation S-B is
not contained herein, and will not be contained, to the best of issuer's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form
10-KSB.  (X)

State
issuer's revenues for its most recent fiscal year:  $6,014,269

State the
aggregate market value of the voting stock held by non-affiliates of the
issuer:  $1,065,053 as of February 28, 2005.

Number of
shares of the issuer's common stock, no par value, outstanding as of February 28,
2005:  76,369,213 shares.

DOCUMENTS
INCORPORATED BY REFERENCE:  None.

Transitional
Small Business Disclosure Format                YES (   )____NO
(X)

Indicate
by check mark whether the Issuer  is an accelerated filer (as defined in Rule
12b-2 of the Act        YES (   )____NO (X)

---

VillageEDOCSFORM 10-KSB INDEX
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

| |          |            |                                                                                                                      |     
| | -------- | ---------- | -------------------------------------------------------------------------------------------------------------------- | ----
| |          |            |                                                                                                                      | Page
| | PART I   |            |                                                                                                                      |     
| |          |            |                                                                                                                      |     
| |          | Item 1.    | Description
  of Business                                                                                            | 3   
| |          | Item 2.    | Description
  of Property                                                                                            | 6   
| |          |            |                                                                                                                      |     
| |          | Item 3.    | Legal
  Proceedings                                                                                                  | 6   
| |          |            |                                                                                                                      |     
| |          | Item 4.    | Submission
  of Matters to a Vote of Security Holders                                                                | 6   
| |          |            |                                                                                                                      |     
| | PART II  |            |                                                                                                                      |     
| |          |            |                                                                                                                      |     
| |          | Item 5.    | Market for
  Equity Securities and Related Stockholder Matters                                                       | 7   
| |          |            |                                                                                                                      |     
| |          | Item 6.    | Management's
  Discussion and Analysis or Plan of Operations                                                         | 9   
| |          |            |                                                                                                                      |     
| |          | Item 7.    | Financial
  Statements                                                                                               | 21  
| |          |            |                                                                                                                      |     
| |          | Item 8.    | Changes In
  and Disagreements with Accountants on Accounting and Financial Disclosures                              | 21  
| |          |            |                                                                                                                      |     
| |          | Item 8A.   | Controls
  and Procedures                                                                                            | 21  
| |          |            |                                                                                                                      |     
| |          | Item 8B.   | Other
  Information                                                                                                  | 21  
| |          |            |                                                                                                                      |     
| | PART III |            |                                                                                                                      |     
| |          |            |                                                                                                                      |     
| |          | Item 9.    | Directors,
  Executive Officers, Promoters and Control Persons;  Compliance With Section
  16(a) of the Exchange Act | 22  
| |          |            |                                                                                                                      |     
| |          | Item 10.   | Executive
  Compensation                                                                                             | 25  
| |          |            |                                                                                                                      |     
| |          | Item 11.   | Security
  Ownership of Certain Beneficial Owners and Management and Related Stockholder
  Matters                   | 34  
| |          |            |                                                                                                                      |     
| |          | Item 12.   | Certain
  Relationships and Related Transactions                                                                     | 36  
| |          |            |                                                                                                                      |     
| |          | Item 13.   | Exhibits                                                                                                             | 38  
| |          |            |                                                                                                                      |     
| |          | Item 14.   | Principal
  Accountant Fees and Services                                                                             | 41  
| |          |            |                                                                                                                      |     
| |          | Signatures |                                                                                                                      | 42  
| |          |            |                                                                                                                      |     



---

###### PART I

ITEM 1.  DESCRIPTION OF BUSINESS

FORWARD-LOOKING
INFORMATION

This Annual Report
on Form 10-KSB includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
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.  These statements are based on our plans,
intentions, expectation, and belief and are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected or expressed herein. The words "anticipated,"
"believe," "expect," "plan,"
"intended," "seek," "estimate,"
"project," "will," "could," "may," and
similar expressions are intended to identify forward-looking statements. These
statements include, among others, information regarding future operations,
future capital expenditures, and future net cash flow. Such statements reflect
the Company's current views with respect to future events and financial
performance and involves risks and uncertainties, including, without
limitation, general economic and business conditions, changes in foreign,
political, social and economic conditions, regulatory initiatives and
compliance with governmental regulations, the ability to achieve further market
penetration and additional customers, and various other matters, many of which
are beyond the Company's control, including, without limitation, the risks
described under the caption "Factors That May Affect Future Results"
in Item 6 of this Annual Report. Our future results and stockholder values may
differ materially from those expressed in these forward- looking statements.
Many of the factors that will determine these results and values are beyond our
ability to control or predict. 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.



WEBSITE
ACCESS TO REPORTS

The
Company's Internet website address is www.villageedocs.com.  The Company's
annual reports on Form 10-KSB, quarterly reports on Form 10-QSB, current
reports on Form 8-K, and all amendments thereto, are available free of charge
on the Company's website as soon as reasonably practical after such reports are
electronically filed with, or furnished to, the U.S. Securities and Exchange
Commission.

OVERVIEW

VillageEDOCS
(the "Company" or "We") is incorporated in the State of
California. The Company was originally incorporated in 1995 in Delaware as
SoftTek, Inc. In August 1997, we changed our name to SoftTek Technologies Inc.
and reincorporated in California. In 1999 we changed our name to
VillageFax.com, Inc., and then, as of July 11, 2000, to VillageEDOCS. Until
late 1998, the Company provided product marketing services and fax server
products, which were discontinued in 1998.  During 1998 to 2003, our exclusive
line of business was the provision of worldwide, Internet-based,
business-to-business fax services.  In 2003 we made the decision to accelerate
our growth by actively seeking out and pursuing opportunities to acquire
businesses that provide complementary and strategic document management
technologies, greater market penetration, new revenue streams, or new sales
channels for our current service offerings.  On February 17, 2004 we acquired
Tailored Business Systems, Inc., ("TBS") a company that has designed,
produced, installed, provided and supported computer software systems and
services for the governmental sector since 1973. During 2004 and in connection
with our plan to expand the operations of the Company through additional
acquisitions, we formed MessageVision, Inc.  ("MessageVision" or"MVI")
and transferred to it the operations of the fax service.  As a result, the Company
is structured as a holding company, with two wholly owned  subsidiaries. It is
through these subsidiaries that we perform our business.

Also,
unless otherwise indicated by the context, the "Company" means the parent company,
VillageEDOCS.

The
Company's principal executive offices are currently located at 14471 Chambers
Road, Suite #105, Tustin, CA  92780.

**Operating
Segments**

Segment revenue and profit
information is presented in Note 13 (of the Company's 2004 Financial Statements,
filed as Exhibit 99.1 to this report.  See Item 6 "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
for additional financial data and commentary on recent financial results for
operating segments.

The two operating businesses
that are reported as segments are electronic document delivery services (MVI)
and government accounting products and services (TBS). There is appropriate
elimination of the net assets or liabilities of subsidiaries and the immaterial
effect of transactions between segments to arrive at total consolidated data. A
summary description of both of our operating segments follows.

**Electronic
Document Delivery Services**

MessageVision (45% of
consolidated revenues in 2004) is a California corporation formed in 2004 to operate
the historical business of VillageEDOCS, an Internet-based fax service that enables
a user to send an electronic fax document to an individual or to a broadcast
list of thousands through a web browser (i.e. Microsoft Explorer, etc.), e-mail
package (i.e. Microsoft Exchange,  Microsoft Outlook, Lotus, etc.), Microsoft
Windows-based application, Enterprise Resource Planning or Customer
Relationship Management system, or proprietary corporate information system. 
As of February 28, 2005, we had approximately 377 active clients.  During 2004,
no single customer accounted for more than 10% of net sales.

We
use proprietary, internally-developed document processing and transmission
systems to create and send or receive documents for our clients.  We provide
Internet-based fax services that integrate with existing Internet-connected
systems within companies where invoices, statements, purchase orders, ticket
confirmations, and other key documents originate. A typical application is characterized
by the need to deliver time sensitive, personalized documents to a disparate
group of recipients in multiple formats and delivery methods.  Our services are
designed for use by a wide range of industries and enterprise sizes using such
diverse platforms as Microsoft Windows NT/2000/XP, UNIX, and IBM iSeries
(AS/400). Our clients currently include manufacturing companies, E-commerce
providers, application service providers, food service corporations, value
added resellers, weather reporting services, public relations firms, and direct
marketing organizations.   Businesses using J.D. Edwards, Oracle, Peoplesoft,
Infinium, IBS and SAP environments, among others, can use our service to become
fax-enabled without traditional capital expenditures and ongoing maintenance
costs.  We offer our clients the flexibility to send Microsoft Office, Corel,
IBM PCL, Adobe PDF, next-generation HTML, and other types of documents through
our Internet fax service.  In addition, our service is compatible with virtually
any foreign language including character-based Pacific Rim, Middle and Far
Eastern languages.  In addition, we offer our clients robust activity reporting
and job control functions that are not offered by many of our competitors.  In
2003, we introduced, in concert with a business partner, new document management solutions that provide electronic
document presentation functions that enable our clients to automatically
generate and deliver presentation-quality documents from enterprise systems
such as ERP, CRM, and E-Commerce and to populate a database with data from a
document that has either been scanned or received as a fax.

We
charge our clients a fee primarily based upon either the number of pages
delivered and received, or upon the number of minutes expended, for the
delivery or receipt of our clients' documents during the month.  In some cases,
we charge one-time and annual perpetuation fees for custom-developed client
solutions.

Net
sales for the fiscal years ended December 31, 2004 and 2003 were $2,685,882 and
$1,882,027, respectively.

Government
Accounting Products and Services

TBS
(55% of consolidated revenues in 2004) is a Georgia corporation established in
1973.  As a result of the Company pursuing its acquisition strategy, we
acquired TBS in February 2004.  As a result, we are engaged in the business of
creating, maintaining, training, customizing and supporting computer
application programs primarily for the use of city and county governments, the
sale and installation of computer equipment and supplies, the printing and
ordering of forms, the furnishing of consulting services, and the
implementation of internal computer networks in communication with IBM iSeries
servers.  We generate revenues from TBS' established client base in the form of
printing, billing, and fulfillment services as well as maintenance and training
revenues.  We have achieved a dominant share of the Georgia market for small to
medium government entities, enjoying 70% of the municipal government market and
65% of the county government market in that state. Our goals include expanding our
business model to governmental entities regionally and, eventually,
nationwide.  In addition, we intend to expand revenue both from printing and
from subscription-based hosted solutions.

We charge for our proprietary software and for
general-purpose hardware used in providing in-house solutions.  When a client elects
to use the hosted Application Service Provider service, we charge a monthly fee
per seat for the use of the Internet based services.  In addition to both
offerings, we charge for consulting, installation, implementation, support,
annual maintenance and training.  We charge separately for printing and forms
jobs based on the specific nature of the requirements.  For printing, it is
generally per mailing and for forms on a per page basis.  Net sales for the period
from February 17, 2004 (date of acquisition) through December 31, 2004 were
$3,328,387.

PRODUCTS
AND SERVICES DEVELOPMENT

The
Company actively and continually engages in development of additional products
and services to offer to our existing and potential new clients.

Our
ability to sustain our development activities is dependent upon the
availability of sufficient funds from operations or other sources such as proceeds
received by the Company from the sale of common stock, bank lines of credit or
other credit facilities.

COMPETITION

Many
of our existing competitors, as well as a number of potential new competitors,
have longer operating histories, greater name recognition, larger customer
bases and significantly greater financial, technical and marketing resources
than the Company's subsidiaries. Such competitors may be able to undertake more
extensive marketing campaigns, adopt more aggressive pricing policies and make
more attractive offers to potential employees and distribution partners. While
we believe that MVI can compete effectively because we offer our clients
certain capabilities that much of the competition does not offer, such as
custom integration, private-labeling, and electronic document presentation, and
while we believe TBS can compete effectively because we provide affordable and
reliable full-service solutions tailored to the needs of local governments, there
can be no assurance that the Company's competitors will not develop similar
products and services that are equal or superior to ours, or that achieve
greater market acceptance than the Company's offerings.

OUTLOOK
AND STRATEGY

During
2005, we intend to continue our focus on obtaining growth from higher margin products
and services at MVI and TBS, as well as growth from acquisitions of companies
that consistently generate net income and positive cash flows.  We believe that
this strategy offers the best opportunity for the Company's operations to continue
to generate positive operating income and cash flows from operations and to
achieve net income in 2005.

To
reach this goal, we intend to continue our strategy of cost containment. 
Should additional growth capital become available during 2005, we intend to
direct the capital toward increasing sales and marketing while holding down
costs for general and administrative as well as product and technology expenses.

EMPLOYEES

As
of February 28, 2005, the holding company had 3 full-time employees, each of
whom are executive officers.  MessageVision had 15 full-time employees. These
employees include 6 engaged in sales and marketing, 2 in technology
development, 5 in operations, and 2 in administration.   TBS had 20 full-time
employees, including 2 engaged in sales and marketing, 3 in technology
development, 10 in operations, and 5 in administration.

---



ITEM
2.  DESCRIPTION OF PROPERTY

The Company occupies office
space in California and Georgia.  The operations of both the Company and
MessageVision are conducted from approximately 3,600 square feet of leased
office space located at 14471 Chambers Road, Suite 105, Tustin, California
92780.  The Company leases the Tustin office space pursuant to an operating
lease agreement expiring in May 2007 at a cost of $5,380 per month.   The
operations of TBS are conducted from approximately 6,200 square feet of leased
office space located at 40 Joe Kennedy Blvd., Statesboro, GA  30458.  The
Company leases the Statesboro office space pursuant to an operating agreement
expiring in January 2009 at a cost of $6,200 per month.  The office building is
owned by a partnership controlled by TBS' former owners, who are presently
significant employees of TBS (see Item 12 "Certain Relationships and
Related Transactions").

Additionally, the
Company leases space and operating systems equipment from SBC in Irvine,
California at a cost of approximately $6,400 per month primarily to support the
service operations of MessageVision.  The highly secure SBC facility is served by
all major global telecommunications carriers and is a physically-,
environmentally-, and utility-redundant site with multiple telecommunications
feeds, multiple emergency power generators, and emergency fuel reserves. These
fully redundant systems and emergency power provisions are designed to provide
non-stop service and no single point of failure.



ITEM
3.  LEGAL PROCEEDINGS

The
Company is not a party in any lawsuits.

In
early 1999, the Company received communications from a company asserting the ownership
of certain United States and Canadian patents and making a licensing proposal
for these patents on unspecified terms. The Company did not accept the
licensing proposal. If these claims prove accurate and the Company is not able
to enter into a licensing agreement on acceptable terms, it would have a
material adverse effect on MVI and the Company.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS

On
June 16, 2004, holders of a majority of the voting capital stock of the Company
acted by written consent in lieu of a special meeting of shareholders to
provide for the following:

1.            Amendment to the Certificate
of Incorporation increasing the number of authorized no par value shares of the
Common Stock from 90,000,000 to 175,000,000, with no stated par value per
share.

2.            Approval of a Plan of
Restructuring (the "Plan"), which includes the reorganization of the
Company's electronic document delivery business by transferring all assets
pertaining to the electronic document delivery business into a wholly-owned
subsidiary of the Company to be formed for the purpose of the reorganization.

3.            Election
of directors.

4.            Modification of the
Company's 2002 Equity Incentive Plan to increase the number of shares reserved
for issuance under the plan from 11,634,584 to 28,000,000.

5.            Ratification and approval of
Executive Employment Agreements and Equity Incentive Arrangements with K. Mason
Conner, H. Jay Hill, Michael Richard and J. Thomas Zender.

---

PART II

ITEM
5.  MARKET FOR EQUITY SECURITIES AND RELATED STOCKHOLDER MATTERS

On January 29, 2002, trading in the Company's common stock commenced on the Over-The-Counter Bulletin Board ("OTCBB").   The following sets forth the range of high and low bid quotations for the periods indicated as reported by Nasdaq Trading and Market Services.  Such quotations reflect prices between dealers without retail mark-up, markdown or commission and may not represent actual transactions.  The Company's common stock is quoted on the OTCBB under the symbol VEDO.  The stock is thinly traded and transactions in the stock are sporadic and infrequent.





| | Quarter Ended                           | High Bid    | Low Bid      |  
| | --------------------------------------- | ----------- | ------------ | -
| | --------------------------------------- | ----------- | ------------ |  
| | March 31, 2004                          | $           | 0.180        | $
| | June 30, 2004                           | $           | 0.190        | $
| | September 30, 2004                      | $           | 0.200        | $
| | December 31, 2004                       | $           | 0.190        | $
| |                                         |             |              |  

``

As
of December 31, 2004, there were 320holders of record of the Company's
common stock.

The
Company has never paid a cash dividend on its common stock nor does the Company
anticipate paying cash dividends on its common stock in the near future.  It is
the present policy of the Company not to pay cash dividends on the common stock
but to retain earnings, if any, to fund growth and expansion.  Any payment of
cash dividends on the common stock in the future will be dependent upon the
Company's financial condition, results of operations, current and anticipated
cash requirements, plan for expansion, as well as other factors the Board of
Directors deems relevant.



Recent Sales of Unregistered Securities

The
following provides information concerning all sales of securities within the
last fiscal year that were not registered under the Securities Act of 1933, as
amended (the "Securities Act"):

On
February 17, 2004, the Company issued 2,200,000 shares of restricted common
stock to each of Stephen A. Garner and James L. Campbell in partial payment of
the total purchase price for 100% of the common stock of TBS. All 4,400,000
shares were valued at $0.10 per share, the fair market value of the Company's
common stock on the date of acquisition.

On
February 17, 2004 and in connection with the acquisition of TBS, the Company
agreed to issue 132,000 shares of its restricted common stock to H. Jay Hill,
who is an officer and director of the Company, pursuant to Mr. Hill's
employment agreement.  The shares were valued at $0.10 per share, the fair
market value on the date of the acquisition.  The shares were issued on March
11, 2004.

On
February 17, 2004 and in connection with the acquisition of TBS, the Company
agreed to issue 220,000 shares of its restricted common stock to a
non-affiliate pursuant to a finder's fee agreement.  The shares were valued at
$0.10 per share, the fair market value on the date of the acquisition.  The shares
were issued on March 11, 2004.

On
March 11, 2004, the Company issued 24,019 shares of restricted common stock for
$240 in cash in connection with the exercise of a warrant.

On
December 29, 2004, the Company issued 125,000 shares of restricted common stock
at $0.13 per share (fair value on date of issuance) in connection with an
employment agreement.

During
2004, the Company granted to its employees options to purchase shares of its
common stock under the 2002 Plan as follows:  5,150,000 shares at $0.15 per
share, 150,000 shares at $0.17 per share, 2,990,000 shares at $0.18 per share,
10,000 shares at $0.1875 per share, 25,000 shares at $0.19 per share, 35,000
shares at $0.20 per share.   All options were issued above or at the fair
market value on the dates of grant and vest on various dates from the date of
grant through October 2009.

During
the year ended December 31, 2004, the Company borrowed $345,000 from C. Alan
and Joan P. Williams and issued convertible promissory notes bearing interest at
10 percent per annum (the "Notes").   The Notes are secured by a
security interest in all of the Company's assets.  The notes and accrued
interest are due at the earlier of one of three events: 1) October 31, 2005; 2)
acquisition of controlling interest in the Company by a third party; or 3) the
Company achieves equity financing of a minimum of $3,000,000.  If the Company
is acquired, the principal and accrued interest on the Notes, as modified, are
convertible into shares of the Company's common stock at the lower of $2.50 per
share or the price paid per share by the acquirer.  In addition, the principal
and accrued interest on the Notes, as modified, are convertible into shares of
the Company's common stock at a conversion price equal to the lower of $0.07
per share or the average of the Company's common stock closing bid price on the
OTCBB, NASDAQ or other established securities exchange or market for the ten
(10) consecutive trading days prior to the date Mr. or Mrs. Williams delivers
written notice of his or her conversion election to the Company.

On
February 17, 2004, the Company issued a $1,700,000 secured convertible
promissory note for cash.  The note was issued to a related party, C. Alan and
Joan P. Williams, and bears interest at 10 percent per annum.  The note and
accrued interest are due at the earlier of one of three events: 1) October 31,
2007; 2) acquisition of controlling interest in the Company by a third party;
or 3) the Company achieves equity financing of a minimum of $3,000,000.  If the
Company is acquired, the principal and accrued interest on the note are
convertible into shares of the Company's common stock at the lower of $2.50 per
share or the price paid per share by the acquirer.  In addition, the principal
and accrued interest on the note are convertible into shares of the Company's
common stock at a conversion price equal to eighty five percent of average of
the Company's common stock closing bid price on the OTCBB, NASDAQ or other
established securities exchange or market for the ten (10) consecutive trading
days prior to the date Mr. and Mrs. Williams deliver written notice of their
conversion election to the Company.  As an inducement for Mr. and Mrs. Williams
to provide the loan, the Company agreed to issue them a warrant to purchase
5,000,000 shares of the Company's restricted common stock at $0.10 per share
until February 17, 2009.

In
connection with the acquisition of TBS, the Company issued a $300,000
convertible promissory note to Stephen A. Garner and a $300,000 convertible
promissory note to James L. Campbell (the "TBS Notes").  Each of the
TBS Notes bears interest at 5 percent per annum and is due and payable in three
equal annual installments of  $100,000, with the first installment paid in full
during February 2005 and subsequent installments due on February 17, 2006 and
February 17, 2007.  The TBS Notes are secured by a Stock Pledge Agreement and a
Security Agreement.  In addition, Messrs. Garner and Campbell have the right to
convert the balance of unpaid principal and interest of the TBS Notes into
shares of the Company's common stock at the rate of 9.8 shares of Common Stock
for each $1.00 of principal and interest to be converted.

All
offers and sales of our securities described above were made pursuant to Section
4(2) of the Securities Act of 1933 and Regulation D promulgated thereunder.

---

ITEM 6.  MANAGEMENT'S DISCUSSION OR PLAN OF
OPERATIONS

WEBSITE ACCESS TO REPORTS

The Company's Internet website address is www.villageedocs.com.  The
Company's annual reports on Form 10-KSB, quarterly reports on Form 10-QSB, and
current reports of Form 8-K, and all amendments thereto, are available free of
charge on the Company's website as soon as reasonably practical after such
reports are electronically filed with, or furnished to, the U.S. Securities and
Exchange Commission.

General Overview

The following Management Discussion and Analysis or Plan of Operations
should be read in conjunction with the audited consolidated balance sheet as of
December 31, 2004 and the audited consolidated statements of operations,
stockholders' equity and cash flows for each of the years in the two-year
period then ended and the related notes thereto.  This discussion contains
forward-looking statements based upon current expectations that involve risks
and uncertainties, such as our plans, objectives, expectations and intentions.

As
reported in the Report of Independent Registered Public Accounting Firm on our
December 31, 2004 consolidated financial statements, the Company has suffered recurring
losses from operations, and has a working capital deficit that raises
substantial doubt about our ability to continue as a going concern.

The Company cautions readers that important facts and factors described
in this Management's Discussion and Analysis or Plan of Operations and
elsewhere in this document sometimes have affected, and in the future could
affect, the Company's actual results, and could cause the Company's actual
results during 2005 and beyond to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company.

On February 17, 2004, the Company acquired TBS.  During its fiscal year
ended October 31, 2003, TBS's net revenues were $3,324,059.  During the fiscal
year ended December 31, 2003, the Company's net revenues were $1,882,027.  This
acquisition has caused the Company's results of operations during 2004 to vary
significantly from those reported for 2003 due to the consolidation of TBS
during most of 2004.  Accordingly, management believes that the following presentation
of comparative results of operations, while required, may not be meaningful for
2004.

In November 2004, the Company signed a letter of intent to acquire a
Document Management Solutions Provider.  The acquisition is contingent on
financing and other customary closing conditions.  There can be no assurances
that the Company will successfully complete this transaction.

Management
is actively seeking additional financing by issuing equity or a combination of
equity and debt financing from new shareholders and/or lenders in 2005. If the
planned financings are obtained, the Company believes it will generate adequate
cash to sustain operations at current levels until it begins to operate
profitably. There can be no assurance that funding will be available on
acceptable terms, if at all, or that such funds, if raised, would enable the
Company to maintain profitable operations.

CRITICAL ACCOUNTING POLICIES

In
preparing our financial statements, we make estimates, assumptions and
judgments that can have a significant effect on our revenues, income/loss from
operations, and net income/net loss, as well as on the value of certain assets
on our consolidated balance sheet.  We believe that there are several
accounting policies that are critical to an understanding of our historical and
future performance as these policies affect the reported amounts of revenues,
expenses, and significant estimates and judgments applied by management.  While
there are a number of accounting policies, methods and estimates affecting our consolidated
financial statements, areas that are particularly significant include revenue
recognition, stock-based compensation, and goodwill and long-lived assets.  In
addition, please refer to Note 3 to the accompanying consolidated financial
statements for further discussion of our significant accounting policies.

Revenue
Recognition. 
The Company recognizes revenue in accordance with Staff Accounting Bulletin
("SAB") No. 101, "Revenue Recognition in Financial Statements",
as revised by SAB No. 104.  As such, the Company recognizes revenue when
persuasive evidence of an arrangement exists, title transfer has occurred, or
the services have been performed, the price is fixed or readily determinable
and collectibility is probable.  Sales are recorded net of sales discounts.

The
Company has adopted Statement of Position ("SOP") 97-2, "Software
Revenue Recognition," as well as SOP 98-9, "Modification of
SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions." 
The SOPs generally require revenue earned on software arrangements involving
multiple elements to be allocated to each element based on the relative fair
market values of each of the elements. The fair value of an element must be
based on vendor-specific objective evidence ("VSOE") of fair value. Software
license revenue allocated to a software product is recognized upon delivery of
the product, or deferred and recognized in future periods to the extent that an
arrangement includes one or more elements that are to be delivered at a future
date and for which VSOE has not been established.  Maintenance and support
revenue is recognized ratably over the maintenance term.  First-year
maintenance typically is sold with the related software license and renewed on
an annual basis thereafter. Estimated fair values of ongoing maintenance and
support obligations are based on separate sales of renewals to other customers
or upon renewal rates quoted in the contracts. For such arrangements with
multiple obligations, the Company allocates revenue to each component of the
arrangement based on the estimated fair value of the undelivered elements. Fair
value of services, such as consulting or training, is based upon separate sales
of these services. The Company at times may enter into multiple-customer
contracts in which the Company allocates revenue based on the number of
specified users at each customer, and recognizes revenue upon customer
acceptance and satisfying the other applicable conditions of the above
described accounting policy.

Services
revenue is recognized as the service is performed assuming that sufficient
evidence exists to estimate the fair value of the services.  Consulting
and training services are billed based on contractual hourly rates and revenues
are recognized as the services are performed. Consulting services primarily
consist of implementation services related to the installation of the Company's
products which do not require significant customization to or modification of
the underlying software code.

Significant
management judgments and estimates must be made in connection with
determination of the revenue to be recognized in any accounting period. If the
Company made different judgments or utilized different estimates for any period,
material differences in the amount and timing of revenue recognized could
result.

Stock-Based
Compensation. 
The Company accounts for non-employee stock-based compensation under Statement
of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting
For Stock-Based Compensation."  SFAS 123 defines a fair value based method
of accounting for stock-based compensation.  However, SFAS 123 allows an entity
to continue to measure compensation cost related to stock and stock options
issued to employees using the intrinsic method of accounting prescribed by
Accounting Principles Board Opinion No. 25, as amended ("APB 25"),
"Accounting for Stock Issued to Employees." Under APB 25,
compensation cost, if any, is recognized over the respective vesting period
based on the difference, on the date of grant, between the fair value of the
Company's common stock and the grant price. Entities electing to remain with
the accounting method of APB 25 must make pro forma disclosures of net income
and earnings per share, as if the fair value method of accounting defined in
SFAS 123 had been applied. The Company has elected to account for its
stock-based compensation to employees under APB 25.  See New Accounting
Pronouncements below.

Goodwill
and Other Intangible Assets.  The Company has adopted SFAS No. 142 "Goodwill
and Other Intangible Assets."  Under SFAS No. 142, goodwill and
other intangible assets with indefinite lives are no longer subject to periodic
amortization but are instead reviewed annually for impairment, or more
frequently if impairment indicators arise.

Identifiable
assets and liabilities acquired in connection with business acquisitions
accounted for under the purchase method are recorded at their respective fair
values.  Deferred income taxes have been recorded to the extent of
differences between the fair value and the tax basis of the assets acquired and
liabilities assumed.

Long-Lived
Assets. 
The Company's management assesses the recoverability of its long-lived assets
by determining whether the depreciation and amortization of long-lived assets
over their remaining lives can be recovered through projected undiscounted
future cash flows.  The amount of long-lived asset impairment, if any, is
measured based on fair value and is charged to operations in the period in
which long-lived asset impairment is determined by management.

Beneficial
Conversion Feature. 
The convertible feature of certain of our convertible notes provides for a rate
of conversion that is below market value. Such feature is normally
characterized as a "beneficial conversion feature" ("BCF").
Pursuant to Emerging Issues Task Force Issue No. 98-5 ("EITF 98-5"),
"Accounting For Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Conversion Ratio" and Emerging
Issues Task Force Issue No. 00-27,"Application of EITF Issue No. 98-5
To Certain Convertible Instruments," the relative fair values of the
BCFs have been recorded as a discount from the face amount of the respective
debt instrument. The Company is amortizing the discount using the effective
interest method through maturity of such instruments. The Company will record
the corresponding unamortized debt discount related to the BCF and warrants as
interest expense when the related instrument is converted into the Company's
common stock.



RESULTS
OF OPERATIONS

##### Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

##### Net Sales

Net
sales for the year ended December 31, 2004 were $6,014,269, a 220% increase
over 2003 net sales of $1,882,027.  The increase of $4,132,242 in 2004 resulted
from an increase of $803,855, or 43%, in revenue from MVI (which resulted from
growth in the number of higher margin clients) as well as the addition of $3,328,387
in revenue from TBS.  TBS generated 55% of the Company's 2004 revenue between
February 17, 2004 (the date of acquisition) and December 31, 2004.  MVI
generated the remaining 45% of the Company's 2004 revenue, as compared to 2003,
when the operations that the Company has now transferred to MVI comprised 100%
of revenue.

Cost
of Sales

Cost
of sales for the year ended December 31, 2004 were $2,367,789 as compared to
the $920,410 reported for the year ended December 31, 2003.  The increase in
the 2004 period of $1,447,379 resulted from an increase of $37,215 from MVI as
well as the addition of $1,410,164 in costs of sales of TBS.  Total cost of
sales during the 2004 period represented 39% of sales.  Cost of sales for MVI
during the 2004 period represented 36% of sales as compared with 49% of sales
in the 2003 period reflecting reduced telecommunications and other costs
associated with providing electronic document delivery services despite an
improvement in revenues from those services.

Gross
Profit

Gross
profit for the year ended December 31, 2004 increased 279% to $3,646,480 as
compared to $961,617 for the prior year period.  Gross profit margin for 2004
was 61% as compared with 51% for 2003.  Of the overall increase of $2,684,863,
$766,640 is attributable to improved profits from MVI, and $1,918,223 is
attributable to TBS.

Operating
ExpensesOperating
expenses for the year ended December 31, 2004 increased by 42% to $3,368,670
from the $2,365,560 reported in 2003, an increase of $1,003,110.

Product
and technology development decreased $69,671 to $418,444 from the $488,115
reported in 2003.  $136,941 of the net decrease is attributable to a reduction
in staff at MVI; however, that decrease was offset by an increase of $67,270
attributable to TBS.

Sales
and marketing decreased by $80,983 to $725,155 from the $806,138 reported in 2003. 
Of the net decrease, $164,626 is due to a reduction in sales management staff
and a small decrease in spending on sales lead generation programs at MVI;
however, that decrease was offset by an increase of $83,643, the sales and
marketing costs of TBS.

General
and administrative increased by $1,068,412 to $1,990,744 from the $922,332
reported in 2003.   The
overall net increase was comprised of a $653,315 decrease at MVI (comprised of
a decrease in consulting fees, salaries, legal, and accounting) which was
offset by the addition of $1,162,455 in general and administrative expenses of
TBS and $560,072 in general and administrative expenses of the holding company
(comprised of consulting fees, salaries, benefits, legal, accounting, and
travel expenses).

Depreciation
and amortization expense increased $85,352 to $234,327 from the $148,975
reported in 2003.  The overall increase was comprised of a 30% decrease from
electronic document delivery services (due to disposal of certain capitalized
equipment during the fourth quarter of 2003) which was offset by the addition
of $77,617 in depreciation from equipment owned by TBS, and $52,500 in
amortization expense related to intangible assets.

During
the year ended December 31, 2004, expenses related to product and technology
development, sales and marketing, general and administrative, and depreciation
and amortization represented 7%, 12%, 33%, and 4% of net sales, respectively. 
During the year ended December 31, 2003, expenses related to product and
technology development, sales and marketing, general and administrative, and
depreciation and amortization represented 26%, 43%, 49%, and 8% of net sales,
respectively.

Operating
Income (Loss)Income
from operations for the year ended December 31, 2004 was $277,810, an increase
of $1,681,753 (120%) from the loss from operations of $1,403,943 reported in
2003.  The overall increase was comprised of (i) an increase of $1,766,287 in
operating income from MVI, which grew to $362,344 in 2004 (compared to an
operating loss of $1,403,943 in 2003), (ii) the addition of $475,538 in
operating income from TBS during 2004, and (iii) an operating loss of $560,072
from the holding company.

Interest
ExpenseInterest
expense for the year ended December 31, 2004 increased by $4,964 to $666,623
from $661,659 reported in 2003.  The overall increase was comprised of $241,737
in interest on borrowings of TBS (substantially all of which is attributable to
the acquisition financing), which was offset by a $236,773 or 36% decrease from
MVI that resulted from a decrease in charges related to the beneficial
conversion feature associated with 2004 borrowings as compared to 2003
borrowings because of fluctuations in the market price of the Company's common
stock.   Interest expense incurred in connection with capital leases decreased
in the 2004 period as compared with the 2003 period.

Net
LossAs
a result of the foregoing, net loss for the year ended December 31, 2004 was $391,213,
or $0.01 per share, compared to a net loss of $2,106,345, or $0.07 per share,
for the year ended December 31, 2003 on weighted average shares of 35,321,760
and 30,828,738, respectively.



LIQUIDITY

During
the year ended December 31, 2004, the Company's net cash position increased by
$393,307 to $458,009. The Company generated $171,572 from operating activities,
and $1,882,105 from financing activities; however, the Company's investing
activities used net cash of $1,660,370.

Net
cash provided by operating activities for the year ended December 31, 2004 was
$171,572, an increase of $1,171,333 from the $999,761 used in operating
activities in 2003, mainly due to the decrease in net loss for 2004 as well as
an increase in revenues and customer deposits at TBS.

The
Company's investing activities consisted of the acquisition of TBS and purchase
of computer equipment. Net cash used for investment activities increased $1,580,188
to $1,660,370 from the $80,182 reported for 2003.

Net
cash provided by financing activities for the year ended December 31, 2004 was
$1,882,105, and mainly included proceeds of $2,045,000 from stockholder loans.
Net cash provided by financing activities for the year ended December 31, 2003
was $1,091,318, which included proceeds of $1,132,000 from stockholder loans.

On
February 10, 2005, the Company received notice from C. Alan Williams and Joan
P. Williams of their intent to convert $3,682,609 in convertible secured
promissory notes payable and accrued interest thereon to 40,332,669 shares of
the Company's restricted common stock.  As a result of the conversion, the
Williams acquired shared voting and shared dispositive power over seventy-seven
percent (77%), or 59,495,094 shares, of the Company's common stock.  After the
conversion, the amount owed by the Company to the Williams pursuant to
convertible promissory notes payable was $1,000,000 in principal and
approximately $44,000 in unpaid interest.  As a result of the conversion, the
Company will report a reduction in interest expense in connection with its
borrowings from the Williams.  Had the conversion not occurred and assuming all
notes remained outstanding during 2005, management estimates that interest
expense for 2005 would have been approximately $661,000.  As a result of the
conversion, management estimates that interest expense for 2005 on borrowings
from the Williams will not exceed approximately $511,000.



CAPITAL RESOURCES

The Company does not currently have any material commitments for capital
expenditures other than those expenditures incurred in the ordinary course of
business.

Since our inception, our operating and investing activities have used
substantially more cash than they have generated. We believe that we have made
considerable progress toward achieving profitable operations by increasing
revenues from electronic document delivery services and through our recent
acquisition of TBS.  In addition, we are actively seeking opportunities to
acquire or otherwise combine with businesses that are operating profitably and
generating positive cash flows.  However, at present and for the foreseeable
future, we believe that we will continue to need working capital to fund the
growth of our businesses and to absorb the increasing costs associated with
operating as a fully reporting company in the prevailing regulatory
environment.    Accordingly, we may experience negative operating and investing
cash flows through the remainder of 2005 until the electronic document delivery
business and TBS consistently generate net cash flows sufficient to offset the
anticipated expenses of operating the holding company.  While we believe that
our available cash resources combined with our current revenue streams will be sufficient
to meet our anticipated working capital requirements, we will require addition
financing to fund capital expenditure requirements for 2005.  Should our
current revenue streams or margins be subjected to even minor decreases, our
funding requirements could be greater.

We believe that sustainable profitability is achievable; however, we have
a history of losses.  While both MVI and TBS have alternately reported both
monthly operating incomes and monthly operating losses during 2004, operating
incomes have been insufficient to offset operating losses, interest expense and
corporate overhead.  If we are not successful in sustaining and increasing
operating profits from these two reporting segments, or reducing expenses of
the holding company, we may never achieve profitability for the Company as a
whole.  Should we achieve overall profitability in any period, we cannot be
certain that we will sustain or increase such profitability on a quarterly or
annual basis.

Between November 2000 and November 2004, our operating shortfalls were primarily
funded by one majority shareholder, an affiliate, to whom we owe $1,000,000 in
principal and approximately $50,000 in interest as of February 28, 2005.
Assuming that this shareholder continues to fund any future operating
shortfalls, we believe we will be able to sustain operations at current levels.
However, this shareholder has no obligation to continue to fund any future
operating shortfalls and could stop doing so at any time.  We may be required
to alter the terms of the convertible promissory notes held by this shareholder
to induce this shareholder or other such potential lenders to provide
additional loans, which could result in this shareholder or other such
potential lenders obtaining rights, preferences or privileges senior to those
of other creditors or our stockholders.

This estimate is a forward-looking statement that involves risks and
uncertainties. The actual time period may differ materially from that indicated
as a result of a number of factors so that we cannot assure you that our cash
resources will be sufficient for anticipated or unanticipated working capital
and capital expenditure requirements for this period. We will need to raise
additional capital in the future to meet our operating and investing cash
requirements. Such sources of financing could include capital infusions,
additional equity financing, or debt offerings. There can be no assurance that
additional funding will be available on acceptable terms, if at all, or that
such funds if raised, would enable the Company to achieve or maintain
profitable operations.  If we raise additional funds through the issuance of
securities, these securities may have rights, preferences or privileges senior
to those of our common stock, and our stockholders may experience additional
dilution to their equity ownership.

The Report of Independent Registered Public Accounting Firms on our
December 31, 2004 consolidated financial statements includes an explanatory
paragraph stating that the Company has incurred recurring losses, and has a
working capital deficit of $528,587 at December 31, 2004, and that these
factors raise substantial doubt about our ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



RECENT
DEVELOPMENTS

Conversion of Debt

On February 10, 2005, the Company received notice from C. Alan Williams
and Joan P. Williams of their intent to convert $3,682,609 in convertible
secured promissory notes payable and accrued interest thereon to 40,332,669
shares of the Company's restricted common stock.  Per the terms of the
convertible secured promissory notes, the conversion price with respect to
$1,939,652 in principal and interest was $0.07 per share.  The conversion price
with respect to $853,091 in principal and interest was $0.1275 per common
share, which was eighty-five percent of the average of the Company's common
stock closing bid price on the OTCBB for the ten consecutive trading days prior
to February 10, 2005.  The conversion price with respect to $889,866 in
principal and interest was $0.15 per share, which was the average of the
Company's common stock closing bid price on the OTCBB for the ten consecutive
trading days prior to February 10, 2005.

In consideration for the Williams' conversion, the Company granted the
Williams a full-ratchet anti-dilution right to receive additional shares of its
common stock in the event that any shares of common stock or stock purchase
rights are issued by the Company to another noteholder, Mr. James Townsend, in
an amount greater than that which is set forth by the terms of the amended
promissory notes to Mr. Townsend, as of the date of the conversion.  The amount
of additional shares issued to the Williams, if any, shall be determined pro
rata based on the ratio of the Williams' conversion amount to Mr. Townsend's
conversion amount.

As a result of the conversion, the Williams acquired shared voting and
shared dispositive power over seventy-seven percent (77%), or 59,495,094
shares, of the Company's common stock.  After the conversion, the amount owed
by the Company to the Williams pursuant to convertible promissory notes payable
was $1,000,000 in principal and approximately $44,000 in unpaid interest.



FACTORS
THAT MAY AFFECT FUTURE RESULTS

The risks and uncertainties described below are not the only ones we
face. Additional risks and uncertainties not presently known to us may also
adversely impact our business operations. If any of the following risks
actually occur, our business, financial condition, or operating results could
be negatively affected.

Some
of the information in this Annual Report on Form 10-KSB contains
forward-looking statements

ome of the information in this Annual Report on Form 10-KSB contains
forward-looking statements that involve substantial risks and uncertainties.
You can identify these statements by forward-looking words such as
"may", "will", "expect", "intend",
"anticipate", "believe", "estimate" and
"continue" or similar words. You should read statements that contain
these words carefully because they discuss our expectations about our future
performance, contain projections of our future operating results or of our
future financial condition, or state other "forward-looking"
information.
We believe it is important to communicate our expectations to our stockholders.
There may be events in the future, however, that we are not able to predict
accurately or over which we have no control. The risk factors listed in this
section, as well as any cautionary language in this prospectus, provide examples
of risks, uncertainties and events that may cause our actual results to differ
materially from the expectations we describe in our forward-looking statements.
Before you invest in our common stock, you should be aware that the occurrence
of any of the events described in these risk factors and elsewhere in this
prospectus could have a material and adverse effect on our business, results of
operations and financial condition and that upon the occurrence of any of these
events, the trading price of our common stock could decline and you could lose
all or part of your investment.

Our
limited operating history makes evaluating our business and prospects
difficult.

We
have a limited operating history on which you can base an evaluation of our
business and future prospects. You should carefully consider our prospects in
light of the risks and difficulties frequently encountered by early stage
companies in new and rapidly evolving markets. Our success will depend in part
upon our ability to implement and execute our business and marketing strategy.
There is a risk that we will not be able to accomplish our objectives. Failure
to achieve any of our objectives could negatively affect our business,
financial condition and results of operations.

The
market for both business-to-business electronic commerce solutions and for
government accounting products and services is extremely competitive and we may
not be able to compete effectively.

Because
both the business-to-business market place and the business-to-small government
market place are highly competitive and have low barriers to entry, we cannot
assure you that we will be able to compete effectively. We expect competition
to intensify as current competitors expand their product offerings and new
competitors like us enter the market. We cannot assure you that we will be able
to compete successfully against current or future competitors, or that
competitive pressures we face will not harm our business, operating results, or
financial condition.

Many
of our competitors will have, and potential competitors may have, more
experience developing software and matching solutions, larger technical staffs,
larger customer bases, greater brand recognition, and greater financial and
other resources than we have. In addition, competitors may be able to develop
products and services that are superior to our products and services, achieve
greater customer acceptance or have significantly improved functionality as
compared to our existing and future products and services. There is a risk that
the products and services offered by our competitors now or in the future will
be perceived as superior to ours.

Significant
Indebtedness

Our significant debt could adversely affect our financial resources and
prevent us from satisfying our debt service obligations.  We have a significant
amount of indebtedness and are very likely to incur additional indebtedness in
the future.  We presently do not generate sufficient cash flow from operations
to service interest payments.  In the future, we may not generate sufficient
cash flow from operations, or have future borrowings available to us,
sufficient to pay our debt.

Our acquisition of Tailored Business Systems, Inc. and
Potential Future Acquisitions Involve a Number of Risks

Our
acquisition of Tailored Business Systems, Inc. and potential future
acquisitions involve risks associated with assimilating these operations into
our Company; integrating, retaining and motivating key personnel; and
integrating and managing geographically-dispersed operations, integrating the
infrastructures of disparate entities. Additionally,
the acquisition of TBS and future acquisitions could divert attention from
other business concerns and could expose us to unforeseen liabilities.  We relied on debt financing
to purchase TBS and to fund our operating shortfalls.  Consequently our
debt-to-equity ratio is high. The interest costs associated with this debt will
increase our operating expenses and negative cash flow.

The
Internet could become subject to regulations that affect our business.

Our
business segments, both directly and indirectly, rely on the Internet and other
electronic communications gateways. We intend to expand our use of these
gateways. To date, the use of the Internet has been relatively free from
regulatory restraints. However, legislation, regulations, or interpretations
may be adopted in the future that constrain our own and our customers'
abilities to transact business through the Internet or other electronic
communications gateways. There is a risk that any additional regulation of the
use of such gateways could have a material adverse effect on our business,
financial condition, and operating results.

We
depend on key personnel and will need to recruit new personnel as we grow.

As
we attempt to expand our customer base, we will need to add additional key
personnel as we continue to grow. If we cannot attract and retain enough
qualified and skilled staff, the growth of our business may be limited. Our
ability to provide services to clients and expand our business depends, in
part, on our ability to attract and retain staff with professional experiences
that are relevant to technology development and other functions we perform.
Competition for personnel with these skills is intense. Some technical job
categories are under conditions of severe shortage in the United States. In
addition, restrictive immigration quotas could prevent us from recruiting
skilled staff from outside the United States. We may not be able to recruit or
retain the caliber of staff required to carry out essential functions at the
pace necessary to sustain or expand our business.

We
believe our future success will depend in part on the continued employment and
performance of our senior management, our ability to retain and motivate our
officers and key employees, and our ability to identify, attract, hire, train,
retain, and motivate other highly skilled technical, managerial, marketing, and
customer service personnel.

If
we are not able to protect our proprietary technology, our ability to compete
effectively could be damaged.

Despite
any precautions we may take, a third party may be able to copy or otherwise
obtain and use our software or other proprietary information without
authorization or develop similar software independently. We cannot assure you
that the steps we have taken or will take will prevent misappropriation of our
technology. Litigation may be necessary in the future to determine the validity
and scope of the proprietary rights of others, or defend against claims of
infringement or invalidity. This litigation, whether successful or
unsuccessful, could result in substantial costs and diversions of resources,
either of which could harm our business.

Our
business could be adversely affected if we infringe on intellectual property
rights of third parties.

Litigation
regarding intellectual property rights is common in the software and technology
industries. We have in the past received letters alleging that we are
infringing the intellectual property rights of AudioFax. We do not believe the
proprietary nature of the AudioFax software is critical to our current or
future market competiveness. Several providers of fax service software have
patent license agreements with AudioFax, and it is our understanding that our
use of these other fax software platforms would indemnify us from any
infringement of AudioFax patents. We currently plan to migrate to a fax
software platform that is compatible with current technology, has existing
license agreements with AudioFax, and will indemnify us from infringement of
AudioFax patents. This migration is subject to the Company's ability to obtain
the additional capital needed for the license fees for the other fax software
platforms. We may in the future be the subjects of claims for infringement,
invalidity, or indemnification claims based on such claims of other parties'
proprietary rights. These claims, with or without merit, could be time
consuming and costly to defend or litigate, divert our attention and resources,
or require us to enter into royalty or licensing agreements. There is a risk
that such licenses would not be available on reasonable terms, or at all.
Although we believe we have the ability to use our intellectual property to
operate, market, and license our existing products without incurring liability
to third parties, there is a risk that our products and services infringe the
intellectual property rights of third parties.

Our
products and technology depend on the continued availability of licensed
technology from third parties. The loss of such products and technology would
significantly and adversely affect our business.

We
license and will continue to license certain technology and software from third
parties. These licenses are integral to our business. If any of these
relationships were terminated or if any of these third parties were to cease
doing business, we would be forced to spend significant time and money to
replace the licensed software. We cannot assure you that we would be able to
replace these licenses. This could have a material adverse effect on our
business, financial condition, and operating results.

Acts
of terrorism, responses to acts of terrorism and acts of war may impact our
business and our ability to raise capital.

The
September 11, 2001 terrorist attacks in the United States are unprecedented
acts of international terrorism. We cannot predict the continued effect of
those acts on the economy of the United States or on the global economy. Future
acts of war or terrorism, national or international responses to such acts, and
measures taken to prevent such acts may harm our ability to raise capital or
our ability to operate.  In addition, the threat of future terrorist acts or
acts of war may have effects on the general economy or on our business that are
difficult to predict. We are not insured against damage or interruption of our
business caused by terrorist acts or acts of war.

Our
current and future revenues are unpredictable and our quarterly operating
results may fluctuate significantly.

We
have a limited operating history, and have generated only limited revenues to
date. We cannot forecast with any degree of certainty the amount of revenue to
be generated by any of our services. In addition, we cannot predict the
consistency of our quarterly operating results. Factors which may cause our
operating results to fluctuate significantly from quarter to quarter include: 
  our ability to attract new and repeat customers;
  our ability to keep current with the evolving requirements of our target
market;
  our ability to protect our proprietary technology;
  the ability of our competitors to offer new or enhanced products or services;
and
  unanticipated delays or cost increases with respect to research and
development.
Because of these and other factors, we believe that quarter-to-quarter
comparisons of our results of operations are not good indicators of our future
performance. If our operating results fall below the expectations of securities
analysts and investors in some future periods, then our stock price may
decline.

One shareholder owns a majority of our outstanding common stock and is
able to control our actions.

One
shareholder and his wife own 59,495,094 shares, or approximately 77%, of the
outstanding shares of our common stock as of February 28, 2005.  These
individuals have the ability to elect our entire board of directors and to
approve or disapprove all other matters requiring the vote of shareholders.

Our
officers and directors may be able to influence stockholder actions.

Executive
officers and directors, in the aggregate, beneficially own approximately 15% of
our outstanding voting stock. These stockholders acting together may be able to
significantly influence matters requiring approval by our stockholders,
including the election of directors, and the approval of mergers or other
business combination transactions in a manner that could conflict with our
other stockholders.

Our
Certificate of Incorporation limits director liability, thereby making it
difficult to bring any action against them for breach of fiduciary duty.

As
permitted by California law, the Company's Certificate of Incorporation limits
the liability of directors to the Company or its stockholders for monetary
damages for breach of a director's fiduciary duty except for liability in
certain instances. As a result of the Company's charter provision and
California law, stockholders may have limited rights to recover against
directors for breach of fiduciary duty.

Penny
stock regulations may impose certain restrictions on marketability of our
stock.

The
Securities and Exchange Commission (the "Commission) has adopted
regulations which generally define a "penny stock" to be any equity
security that has a market price (as defined) of less than $5.00 per share,
subject to certain exceptions. As a result, our Common Stock is subject to
rules that impose additional sales practice requirements on broker-dealers who
sell such securities to persons other than established customers and accredited
investors (generally those with assets in excess of $1,000,000 or annual income
exceeding $200,000, or $300,000 with their spouse). For transactions covered by
these rules, the broker-dealer must make a special suitability determination
for the purchase of such securities and have received the purchaser's written
consent to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules require delivery,
prior to the transaction, of a risk disclosure document mandated by the
Commission relating to the penny stock market. The broker-dealer must also
disclose the commission payable to both the broker-dealer and the registered
representative, current quotations for the securities and, if the broker-dealer
is the sole market maker, the broker-dealer must disclose this fact and the
broker-dealers presumed control over the market. Finally, monthly statements
must be sent disclosing recent price information for the penny stock held in
the account and information on the limited market in penny stocks.
Consequently, the "penny stock" rules may restrict the ability of
broker-dealers to sell the Company's securities and may affect the ability of
purchasers in this Offering to sell the Company's securities in the secondary
market and the price at which such purchasers can sell any such securities.

We
have never paid dividends on our common stock and do not expect to pay any in
the foreseeable future.

The
Company has not paid any dividends on its Common Stock since its inception and
does not intend to pay dividends on its Common Stock in the foreseeable future.
Any earnings that the Company may realize in the foreseeable future will be
retained to finance the growth of the Company.

The
number of shares eligible for future sale may adversely affect the market for
our common stock.

As
of February 28, 2005, the Company had 76,369,213 shares of its Common Stock
issued and outstanding, approximately 71,000,000 of which are "restricted
securities." Rule 144 of the Commission provides, in essence, that a
person holding "restricted securities" for a period of one year may
sell only an amount every three months equal to the greater of (a) one percent
of the Company's issued and outstanding shares, or (b) the average weekly
volume of sales during the four calendar weeks preceding the sale. The amount
of "restricted securities" which a person who is not an affiliate of
the Company may sell is not so limited, since non-affiliates may sell without
volume limitation their shares held for two years if there is adequate current
public information available concerning the Company. In such an event,
"restricted securities" would be eligible for sale to the public at
an earlier date. The sale in the public market of such shares of Common Stock
may adversely affect prevailing market prices of the Common Stock.

Outstanding
options and warrants could affect the market price of our common stock.

As
of December 31, 2004, there were outstanding stock options and warrants to purchase
an aggregate of 25,109,670 shares of Common Stock at exercise prices ranging
between of $0.10 per share and $2.50 per share.  The exercise of such
outstanding options will dilute the percentage ownership of the Company's
stockholders, and any sales in the public market of shares of Common Stock
underlying such securities may adversely affect prevailing market prices for
the Common Stock. Moreover, the terms upon which the Company will be able to
obtain additional equity capital may be adversely affected since the holders of
such outstanding securities can be expected to exercise their respective rights
therein at a time when the Company would, in all likelihood, be able to obtain
any needed capital on terms more favorable to the Company than those provided
in such securities.

Our
stock price will fluctuate which could result in substantial losses for
investors

The market price for our common stock may fluctuate significantly in response
to a number of factors, some of which are beyond our control. These factors
include:

| | Quarterly
  variations in operating results;                                                                                
|- | ----------------------------------------------------------------------------------------------------------------------------
| | Changes
  in financial estimates by securities analysts;                                                                    
| | Announcements
  by us or our competitors of new products, significant contracts,
  acquisitions, or strategic relationships;
| | Disputes
  concerning our proprietary rights or any future patents, trademarks or
  copyrights;                             
| | Publicity
  about our company, our products, or our competitors;                                                            
| | Publicity
  regarding actual or potential medical results relating to products under
  development by us or our competitors;
| | Additions
  or departures of key personnel;                                                                                 
| | Any
  future sales of our common stock or other securities;                                                                 
| | Stock
  market price and volume fluctuations of publicly-traded companies; and                                              
| | Business
  combination transactions.                                                                                        
|  |                                                                                                                             

These
and other external factors have caused and may continue to cause the market
price and demand for our common stock to fluctuate substantially, which may
limit or prevent investors from readily selling their shares of common stock
and may otherwise negatively affect the liquidity of our common stock. 
In the past, securities class action litigation has often been brought against
companies following periods of volatility in the market price of their
securities. If securities class action litigation is brought against us it
could result in substantial costs and a diversion of our management's attention
and resources, which could hurt our business.

Trading
in our common stock on the OTCBB may be limited thereby making it more
difficult for investors to resell their shares of our common stock.

Our common stock trades on the OTCBB. The OTCBB is not an exchange and, because
trading of securities on the OTCBB is often more sporadic than the trading of
securities listed on an exchange or NASDAQ, you may have difficulty reselling
any of the shares that you purchase from the selling shareholders.

Our
common  shareholders may experience substantial dilution

The sale of a substantial number of shares of our common stock in the public
market, or the prospect of such sales, could materially and adversely affect
the market price of our common stock. We are authorized to issue up to 175,000,000
shares of common stock. To the extent of such authorization, our Board of
Directors will have the ability, without seeking stockholder approval, to issue
additional shares of common stock in the future for such consideration as our
Board of Directors may consider sufficient. The issuance of additional common
stock in the future will reduce the proportionate ownership and voting power of
our common stock held by existing stockholders. Sales in the public market of
substantial amounts of our common stock, including sales of common stock
issuable upon exercise of options and warrants, could depress prevailing market
prices for our common stock. Even the perception that such sales could occur
might impact market prices for the common stock. The existence of outstanding
options and warrants may prove to hinder our future equity financings.



NEW
ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS No. 123 (revised 2004) ("SFAS
123(R)"), "Share-Based Payment," to provide investors and
other users of financial statements with more complete and neutral financial
information by requiring that the compensation cost relating to share-based
payment transactions be recognized in financial statements. That cost will be
measured based on the fair value of the equity or liability instruments issued.
SFAS 123(R) covers a wide range of share-based compensation arrangements
including share options, restricted share plans, performance-based awards,
share appreciation rights, and employee share purchase plans. SFAS 123(R)
replaces SFAS No. 123, and supersedes APB 25. SFAS No. 123, as originally
issued in 1995, established as preferable a fair-value-based method of
accounting for share-based payment transactions with employees. However, that
Statement permitted entities the option of continuing to apply the guidance in
APB 25, as long as the footnotes to financial statements disclosed what net
income would have been had the preferable fair-value-based method been used.
Small business issuers will be required to apply SFAS 123(R) as of the first
interim or annual reporting period that begins after December 15, 2005. The
Company is in the process of evaluating whether the adoption of SFAS 123(R)
will have a significant impact on the Company's overall results of operations
or financial position.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of
Nonmonetary Assets", an amendment of APB Opinion No. 29, "Accounting
for Nonmonetary Transactions." APB No. 29 is based on the principle
that exchanges of nonmonetary assets should be measured based on the fair value
of the assets exchanged. The guidance in APB No. 29, however, included certain
exceptions to that principle. SFAS No. 153 amends APB No. 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets and replaces
it with a general exception for exchanges of nonmonetary assets that do not
have commercial substance, that is, if the future cash flows of the entity are
not expected to change significantly as a result of the exchange. The
provisions of SFAS No. 153 are effective for nonmonetary asset exchanges
occurring in fiscal periods beginning after June 15, 2005. We anticipate that SFAS No.153 will not have an impact on our
financial statements.

---

Exhibit
99.1, "VillageEDOCS Financial Statements" is incorporated herein by this
reference.

| |  |  |  | 
| |  |  |  | 

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM
8A - CONTROLS AND PROCEDURES

As of December 31, 2004, an evaluation was
carried out under the supervision and with the participation of the Company's
management, including our Chief Executive Officer and our Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934).  Based upon that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that the design and
operation of these disclosure controls and procedures were effective.  No
significant changes were made in our internal controls or in other factors that
could significantly affect these controls subsequent to December 31, 2004.

(a) Evaluation of Disclosure Controls and
Procedures. The Company carried out an evaluation under the supervision and
with the participation of the Company's management, including the Company's
Chief Executive Officer ("CEO") and Chief Financial Officer
("CFO"), of the effectiveness of the Company's disclosure controls
and procedures. Based upon that evaluation, the CEO and CFO concluded that as
of December 31, 2004 our disclosure controls and procedures were effective in
timely alerting them to the material information relating to the Company (or
the Company's consolidated subsidiaries) required to be included in the
Company's periodic filings with the SEC, subject to the various limitations on
effectiveness set forth below under the heading, "LIMITATIONS ON THE
EFFECTIVENESS OF INTERNAL CONTROLS," such that the information relating to
the Company, required to be disclosed in SEC reports (i) is recorded,
processed, summarized and reported within the time periods specified in SEC
rules and forms, and (ii) is accumulated and communicated to the Company's
management, including our CEO and CFO, as appropriate to allow timely decisions
regarding required disclosure.

(b) Changes in internal control over financial
reporting. There has been no change in the Company's internal control over
financial reporting that occurred during the fiscal quarter ended December 31,
2004 that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL
CONTROLS

The Company's management, including the CEO and
CFO, does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud
and material error. An internal control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of the control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within the Company have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns
can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or
more people, or by management override of the internal control. The design of
any system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
Over time, control may become inadequate because of changes in conditions,
and/or the degree of compliance with the policies or procedures may
deteriorate.

---

PART
III



##### ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS OF THE COMPANY

DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT
EMPLOYEES OF THE COMPANY

The following table sets forth certain
information with respect to each person who is a director, executive officer,
or significant employee of the Company or its subsidiary as of February 28, 2005.

| | Name                         | Age    | Position                                                          
| | ---------------------------- | ------ | ------------------------------------------------------------------
| | ---------------------------- | ------ | ---------------------------------------------------------         
| |                              |        |                                                                   
| | J. Thomas Zender             | 65     | Chairman of the Board, Corporate Secretary                        
| |                              |        |                                                                   
| | K. Mason Conner              | 48     | President, Chief Executive Officer, Director                      
| |                              |        |                                                                   
| | H. Jay Hill                  | 65     | Executive Vice President of Corporate
  Development, Director     
| |                              |        |                                                                   
| | Michael A. Richard           | 36     | Chief Financial Officer                                           
| |                              |        |                                                                   
| | James L. Kolassa             | 51     | President of Tailored Business Systems, Inc.                      
| |                              |        |                                                                   
| | Stephen A. Garner            | 50     | Co-Chief Information Officer  of Tailored
  Business Systems, Inc.
| |                              |        |                                                                   
| | James L. Campbell            | 48     | Co-Chief Information Officer  of Tailored
  Business Systems, Inc.
| |                              |        |                                                                   

Executive
officers are appointed by the Board of Directors and, subject to the terms of
their employment agreements, serve until their successors are duly elected and
qualify, subject to earlier removal by the Board of Directors. Directors are
elected at the annual meeting of shareholders to serve for their term and until
their successors are duly elected and qualify, or until their earlier
resignation, removal from office, or death. The remaining directors may fill
any vacancy in the Board of Directors for an unexpired term. The term of the
current directors continues until the next annual meeting of shareholders to be
held in 2005. Mr. Zender has been a director since August 1997, Mr. Hill since
October 1997, and Mr. Conner since October 1998.

---

BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS,
DIRECTORS
AND SIGNIFICANT EMPLOYEES

J.
Thomas Zender has been a director since 1997 and has been Chairman of the Board
since January 2001. He is an information technology industry consultant
specializing in strategic business development with 36 years of management and
marketing experience. He has held management positions at General Electric,
Honeywell, ITT and other companies.  He has been an officer in three
publicly held corporations, one NYSE listed company and two NASDAQ traded
companies. From 1996 through 2001 Mr. Zender served as an interim executive for
several companies in their early stage, including CEO of VillageEDOCS from 1997
to 1999.  He serves on the boards of two companies in the information
technology sector, one publicly traded and the other privately held. 
Currently, Mr. Zender is President and CEO of Unity, a global not-for-profit
organization, where he also serves on the board of directors.

K.
Mason Conner joined the Company as Vice-President of Sales in 1997 and has been
President and a Board Member since 1998, Acting Vice-President of Sales between
1998 and 2002, and Chief Executive Officer since 1999.   Mr. Conner
is also a Director and the President of Tailored Business Systems, Inc.
("TBS"), which became a wholly owned subsidiary of the Company on
February 17, 2004.  He has 27 years in sales and business management experience,
including 19 years of direct and channel sales experience in the voice and data
communications products and services industry. In the early 1980's he was
involved in the application of Internet Protocol technologies with the
military. In the late 1980s and early 1990s he was a principal strategist for
an international initiative to transform K-12 education through the use of the
Internet. He was a lead consultant with LTS for the electronic vulnerability
threat assessment of the Los Angeles Airport Department after the "UnaBomber"
threat. He has held senior sales management positions with Banyan Systems,
Doelz Networks, and Timeplex. During the five years prior to joining the
Company, Mr. Conner was Director of Sales at Telecom Multimedia Systems from
1996 to 1997, Vice President of Sales at Lo Tiro-Sapere from 1995 to 1996, and
Vice President of Sales at Digital Network Architectures from 1991 to 1995.

H.
Jay Hill has been a director since 1997 and became the Executive Vice President
of Corporate Development in May of 2003.  Mr Hill is also a Vice President
of TBS.  For the last 20 years, he has primarily been a senior executive
in turnaround situations in information technology and telecommunication
companies. From November 2000 to May of 2003, Mr. Hill was CEO, President and a
Director of LightPort Advisors, Inc, a private Internet service provider for
the financial services market.  He has held similar positions with Unitron
Medical Communications, Inc. (d/b/a Moon Communications) (1999-2000) and Amnet
Corporation (Netlink) (1989-1994), and has held senior sales and marketing
management positions with SunCoast Environmental Controls (1996-1999),
Technology Research Corporation (1994-1996), Harris Corporation, Doelz
Networks, Paradyne/AT&T, and Inforex.  His primary background in sales
and marketing commenced with Philadelphia Electric Company and IBM. 
During 1999, Moon Communications, which was then a subsidiary of Sabratek
Corp., filed for protection under Chapter 11 of the U.S. Bankruptcy Code in
connection with the reorganization of Sabratek.

Michael A. Richard joined the Company in February 2001
and is the Chief Financial Officer and Corporate Secretary.  Mr. Richard
is also a Director and the Secretary of TBS.  Mr. Richard has over 14
years of diverse management and public corporate reporting experience for
start-up and early stage ventures.  From 1999-2000 he served as V.P.
Controller for The BigHub.com, Inc., a public new media company providing
unique content, private label search engine, e-commerce solutions, and controlling
a direct mail operation.  From 1995-1999, Mr. Richard served first as
Controller and then as Vice President, Accounting (principal accounting
officer), and finally as a Director of PortaCom Wireless, Inc., a public
developer and operator of companies with contracts to provide wireless
telecommunication services in China and other emerging markets.

James L. Kolassa joined the Company in April 2004 and is
the President of TBS.   Mr. Kolassa has over 25 years of experience
and success in the computer industry from direct sales with IBM and Hitachi
Data Systems to channel development and distribution with both SupportNet and
KeyLink Systems.  Mr. Kolassa also served as the President of  a
software firm that he later sold.  Mr. Kolassa holds a BBA in Marketing
Management from Western Michigan University and an MBA in MIS from Indiana
University.

Stephen L. Garner is a Vice President
and Co-Chief Technology Officer of TBS.  From 1988 through the date of the
acquisition, Mr. Garner served as the President of TBS.  Mr. Garner has
over 25 years experience in Information Technology.  Mr. Garner obtained a
BS in Mathematics from Georgia Southern University in 1978. Mr. Garner is also
a Certified IBM Technical Solutions Provider.

James
M. Campbell is a Vice President and Co-Chief Technology Officer of
TBS.   From 1988 through the date of the acquisition, Mr. Campbell
served as the Secretary-Treasurer of TBS.  Mr. Campbell has over 25 years
of experience in the design and implementation of system software.  Mr.
Campbell obtained a BBA in Accounting from Georgia Southern University in 1978
and is a Certified Public Accountant.

BOARD OF DIRECTORS

The
Company's Bylaws fix the size of the Board of Directors at no fewer than three
and no more than five members, to be elected annually by a plurality of the
votes cast by the holders of Common Stock, and to serve until the next annual
meeting of stockholders and until their successors have been elected or until
their earlier resignation or removal. We currently have three directors, all of
whom were elected to their current terms on June 16, 2004.  The Company
currently has no Audit, Compensation or Nominating Committees.

DEPENDENCE ON KEY MANAGEMENT

The
Company's performance depends substantially on the continued services and
performance of its senior management and other key personnel.  The Company's
performance also depends on its ability to retain and motivate its other
qualified officers and key employees.   The loss of services of one or more of
these employees could have a material adverse effect on the business of the
Company.  There can be no assurance that the Company will be successful in
attracting and retaining such personnel.  Competition for such personnel is
intense.

---

ITEM 10.  EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The
following table shows the compensation paid or accrued by the Company for the
fiscal years ended December 31, 2004 and 2003 to or for the account of the
President and Chief Executive Officer and executive officers and significant
employees of the Company who received benefits or annual salary and bonus of
$100,000 or more during the stated period.

| | -------------------------------------------------------------------------------------------------------  
| | ---------------------------------------------------------------------------------------------------------
| |                                                                                                          
| | -------------------                                                                                      
| | Name & Principal                                                                                         
| | Position                                                                                                 
| | --------------------                                                                                     
| | Fiscal
  2004                                                                                            
| | --------------------                                                                                     
| | K.
  Mason Conner                                                                                        
| | President,
  CEO                                                                                         
| |                                                                                                          
| | H.
  Jay Hill                                                                                            
| | E.V.P.
  Corporate                                                                                       
| | Development                                                                                              
| |                                                                                                          
| | James
  L. Kolassa                                                                                       
| | President,
  Tailored                                                                                    
| | Business
  Systems                                                                                       
| |                                                                                                          
| | James
  L. Campbell                                                                                      
| | Co-CIO,
  Tailored                                                                                       
| | Business
  Systems                                                                                       
| |                                                                                                          
| | Stephen
  A. Garner                                                                                      
| | Co-CIO,
  Tailored                                                                                       
| | Business
  Systems                                                                                       
| |                                                                                                          
| |                                                                                                          
| | -------------------                                                                                      
| | Fiscal
  2003                                                                                            
| | --------------------                                                                                     
| | K.
  Mason Conner                                                                                        
| | President,
  CEO                                                                                         
| | ---------------------------------------------------------------------------------------------------------
| |                                                                                                          



EMPLOYMENT AND OTHER AGREEMENTS

We
have entered into employment agreements with K. Mason Conner, our President and
Chief Executive Officer, H. Jay Hill, our Executive Vice President - Corporate
Development, and Michael Richard, our Chief Financial Officer.  On June 16,
2004, a written consent was filed with the Company to approve each of these
employment agreements.  Following is a summary of the significant terms of each
of these agreements:

K.
Mason Conner.Mr.
Conner's employment agreement, dated as of June 10, 2004, provides for Mr.
Conner to serve as our President and Chief Executive Officer for a term of
three years from June 15, 2004.  The employment agreement provides that, the
term of the agreement shall automatically be extended for successive one year
renewal terms, provided that if either Mr. Conner or the Company gives the
other party at least ninety days advance written notice of his or its intention
to not renew the agreement for an additional term, the agreement will terminate
upon the expiration of the current term.

The
employment agreement provides for Mr. Conner to receive a base salary of
$150,000 for the first year.  The Company will review Mr. Conner's salary at
annual intervals, and may adjust his annual base salary from time to time as
the Board of Directors or its Compensation Committee deems to be appropriate,
provided, however, that the salary for the second and each succeeding year
shall not be less than 105% of the salary for the prior year.  Mr. Conner is
entitled to an incentive bonus based upon the Company's net income.  For the
2004 fiscal year, Mr. Conner will be paid a bonus equal to 10% of the Company's
net income.  For fiscal 2005 and 2006, the percentage of net income paid to Mr.
Conner will be determined by the Board of Directors, but may not be less than
4% of net income for 2005 and 2% for 2006.

Mr.
Conner will be paid an incentive bonus for each acquisition closed during the
term of the employment agreement.  For each acquisition, Mr. Conner will be
issued shares of the Company's common stock having an aggregate market value on
the date of such closing equal to 2% of the acquisition price.

Pursuant
to the employment agreement, we have granted Mr. Conner options for 3,500,000
shares of our common stock (the "Option Shares").  The Option Shares
will vest over a five year period and may be exercised during the seven year
period after vesting.  If Mr. Conner voluntarily resigns or is terminated for
cause, all unvested options will be forfeited and cancelled; provided, that Mr.
Conner shall be fully vested in then unvested Option Shares (A) in the event of
his termination by the Company other than for cause, (B) upon the consummation
of a Change in Control, or (C) upon Mr. Conner's death or disability.  Mr. Conner
is entitled to full ratchet anti-dilution protection with respect to forty
(40%) percent of vested options.  The Company has agreed to use its best
efforts to register, and maintain the effectiveness of a registration statement
on Form S-8, for resale all of the Option Shares granted to Mr. Conner and, at
any time that Form S-8 is not effective, to grant him piggyback registration
with respect to any registration statement filed by the Company.

Mr.
Conner also is entitled to participate in any benefits plans maintained by the
Company for its executives or employees and is entitled to four weeks annual
vacation.  He is also entitled to be reimbursed for business expenses incurred
by him in promoting the Company's business.

If
Mr. Conner's employment is terminated for reasons other than death, disability,
or voluntary termination by Mr. Conner, the Company will be obligated to make
monthly payments to Mr. Conner for each month during the remaining term of the
employment agreement, but not less than twelve (12) months.  Each monthly
payment shall be equal to one-twelfth (1/12th) of twice Mr. Conner's annual
base salary, as in effect on the date of termination.  In addition, any
restricted stock, stock options or other awards granted to him will become immediately
vested in full and, in the case of stock options, exercisable in full. Mr.
Conner will also be permitted to continue to participate for a period of one
year, at the Company's expense, in all benefit and insurance plans, coverage
and programs in which he was participating as of the termination date.

The
Company may terminate the agreement if it determines that Mr. Conner has been
unable to attend to his duties for at least ninety (90) days because of a
medically diagnosable physical or mental condition, and has received a written
opinion from a physician acceptable to the Board that such condition prevents
him from resuming full performance of his duties and is likely to continue for
an indefinite period.  Upon such termination, the Company shall pay Mr. Conner
a monthly disability benefit equal to one-twelfth (1/12th) of his current
annual base salary at the time he became permanently disabled until the
earliest of (i) the month in which the he returns to active employment, either
with the Company or otherwise, (ii) the end of the initial term of the
agreement, or the current renewal term, as the case may be, or (iii) the
twenty-fourth month after the date of the termination. Any such payments shall
be reduced by any amounts paid to Mr. Conner under any long-term disability
plan or other disability program or insurance policies maintained or provided
by the Company.

If
Mr. Conner is terminated for Cause, he shall be entitled to receive his base
salary through the date of termination and any non-forfeitable benefits earned
and payable to him under the terms of deferred compensation or incentive plans
maintained by the Company.

In
the event of a Change in Corporate Control, any restricted stock, stock options
or other awards granted to Mr. Conner shall become immediately vested in full
and, in the case of stock options, exercisable in full.  Additionally, if at
any time during the twelve (12) consecutive months following or six (6) months
prior to the occurrence of a Change in Corporate Control, Mr. Conner is
involuntarily terminated (other than for Cause) by the Company, he shall be
entitled to lump sum severance pay in an amount equal to the sum of (i) 299% of
his annual base salary in effect at the time of the Change in Corporate Control
plus (ii) 299% of the annual bonus paid to him with respect to the last fiscal
year ending prior to the Change in Corporate Control.

H.
Jay Hill. 
Mr. Hill's employment agreement, dated as of June 10, 2004, provides for Mr.
Hill to serve as our Executive Vice President - Corporate Development for a
term of three years from June 16, 2004.  The employment agreement provides
that, the term of the agreement shall automatically be extended for successive
one year renewal terms, provided that if either Mr. Hill or the Company gives
the other party at least ninety days advance written notice of his or its
intention to not renew the agreement for an additional term, the agreement will
terminate upon the expiration of the current term.

The
employment agreement provides for Mr. Hill to receive a base salary of $120,000
for the first year.  The Company will review Mr. Hill's salary at annual
intervals, and may adjust his annual base salary from time to time as the Board
of Directors or its Compensation Committee deems to be appropriate, provided,
however, that the salary for the second and each succeeding year shall not be
less than 105% of the salary for the prior year.

Mr.
Hill will be paid an incentive bonus for each acquisition closed during the
term of the employment agreement.  For each acquisition, Mr. Hill will be paid
in kind consideration in an amount equal to 3.5% of the acquisition price.

Pursuant
to the employment agreement, we have granted Mr. Hill options for 500,000
shares of our common stock (the "Option Shares").  The Option Shares
will vest over a five year period and may be exercised during the seven year
period after vesting.  If Mr. Hill voluntarily resigns or is terminated for
cause, all unvested options will be forfeited and cancelled; provided, that Mr.
Hill shall be fully vested in then unvested Option Shares (A) in the event of
his termination by the Company other than for cause, (B) upon the consummation
of a Change in Control, or (C) upon Mr. Hill's death or disability.  Mr. Hill
is entitled to full ratchet anti-dilution protection with respect to forty
(40%) percent of vested options.  The Company has agreed to use its best
efforts to register, and maintain the effectiveness of a registration statement
on Form S-8, for resale all of the Option Shares granted to Mr. Hill and, at
any time that Form S-8 is not effective, to grant him piggyback registration
with respect to any registration statement filed by the Company.

Mr.
Hill also is entitled to participate in any benefits plans maintained by the
Company for its executives or employees and is entitled to four weeks annual
vacation.  He is also entitled to be reimbursed for business expenses incurred
by him in promoting the Company's business.

If
Mr. Hill's employment is terminated for reasons other than death, disability,
or voluntary termination by Mr. Hill, the Company will be obligated to make
monthly payments to Mr. Hill for each month during the remaining term of the
employment agreement, but not less than twelve (12) months.  Each monthly payment
shall be equal to one-twelfth (1/12th) of twice Mr. Hill's annual base salary,
as in effect on the date of termination.  In addition, any restricted stock,
stock options or other awards granted to him will become immediately vested in
full and, in the case of stock options, exercisable in full. Mr. Hill will also
be permitted to continue to participate for a period of one year, at the
Company's expense, in all benefit and insurance plans, coverage and programs in
which he was participating as of the termination date.

The
Company may terminate the agreement if it determines that Mr. Hill has been
unable to attend to his duties for at least ninety (90) days because of a
medically diagnosable physical or mental condition, and has received a written
opinion from a physician acceptable to the Board that such condition prevents
him from resuming full performance of his duties and is likely to continue for
an indefinite period.  Upon such termination, the Company shall pay Mr. Hill a
monthly disability benefit equal to one-twelfth (1/12th) of his current annual
base salary at the time he became permanently disabled until the earliest of
(i) the month in which the he returns to active employment, either with the
Company or otherwise, (ii) the end of the initial term of the agreement, or the
current renewal term, as the case may be, or (iii) the twenty-fourth month
after the date of the termination. Any such payments shall be reduced by any
amounts paid to Mr. Hill under any long-term disability plan or other disability
program or insurance policies maintained or provided by the Company.

If
Mr. Hill is terminated for Cause, he shall be entitled to receive his base
salary through the date of termination and any non-forfeitable benefits earned
and payable to him under the terms of deferred compensation or incentive plans
maintained by the Company.

In
the event of a Change in Corporate Control, any restricted stock, stock options
or other awards granted to Mr. Hill shall become immediately vested in full
and, in the case of stock options, exercisable in full.  Additionally, if at
any time during the twelve (12) consecutive months following or six (6) months
prior to the occurrence of a Change in Corporate Control, Mr. Hill is
involuntarily terminated (other than for Cause) by the Company, he shall be
entitled to lump sum severance pay in an amount equal to the sum of (i) 200% of
his annual base salary in effect at the time of the Change in Corporate Control
plus (ii) 200% of the annual bonus paid to him with respect to the last fiscal
year ending prior to the Change in Corporate Control.

Michael
Richard. 
Mr. Richard's employment agreement, dated as of June 10, 2004, provides for Mr.
Richard to serve as our Chief Financial Officer for a term of two years from
June 15, 2004.  The employment agreement provides that, the term of the
agreement shall automatically be extended for successive one year renewal
terms, provided that if either Mr. Richard or the Company gives the other party
at least ninety days advance written notice of his or its intention to not
renew the agreement for an additional term, the agreement will terminate upon
the expiration of the current term.

The
employment agreement provides for Mr. Richard to receive a base salary of
$95,000 for the first year.  The Company will review Mr. Richard's salary at
annual intervals, and may adjust his annual base salary from time to time as
the Chief Executive Officer deems to be appropriate, provided, however, that
the salary for the second and each succeeding year shall not be less than 105%
of the salary for the prior year.

Pursuant
to the employment agreement, we have granted Mr. Richard options for 650,000
shares of our common stock (the "Option Shares").  The Option Shares
will vest over a five year period and may be exercised during the seven year
period after vesting.  If Mr. Richard voluntarily resigns or is terminated for
cause, all unvested options will be forfeited and cancelled; provided, that Mr.
Richard shall be fully vested in then unvested Option Shares (A) in the event
of his termination by the Company other than for cause, (B) upon the
consummation of a Change in Control, or (C) upon Mr. Richard's death or
disability.  Mr. Richard is entitled to full ratchet anti-dilution protection
with respect to forty (40%) percent of vested options.  The Company has agreed
to use its best efforts to register, and maintain the effectiveness of a
registration statement on Form S-8, for resale all of the Option Shares granted
to Mr. Richard and, at any time that Form S-8 is not effective, to grant him
piggyback registration with respect to any registration statement filed by the
Company.

Mr.
Richard also is entitled to participate in any benefits plans maintained by the
Company for its executives or employees and is entitled to two weeks annual
vacation.  He is also entitled to be reimbursed for business expenses incurred
by him in promoting the Company's business.

If
Mr. Richard's employment is terminated for reasons other than death,
disability, or voluntary termination by Mr. Richard, the Company will be
obligated to make monthly payments to Mr. Richard for each month during the
remaining term of the employment agreement, but not less than six (6) months. 
Each monthly payment shall be equal to one-twelfth (1/12th) of his annual base
salary, as in effect on the date of termination.  In addition, any restricted
stock, stock options or other awards granted to him will become immediately
vested in full and, in the case of stock options, exercisable in full. Mr. Richard
will also be permitted to continue to participate for a period of six (6)
months year, at the Company's expense, in all benefit and insurance plans,
coverage and programs in which he was participating as of the termination date.

The
Company may terminate the agreement if it determines that Mr. Richard has been
unable to attend to his duties for at least ninety (90) days because of a
medically diagnosable physical or mental condition, and has received a written
opinion from a physician acceptable to the Board that such condition prevents
him from resuming full performance of his duties and is likely to continue for
an indefinite period.  Upon such termination, the Company shall pay Mr. Richard
a monthly disability benefit equal to one-twelfth (1/12th) of his current
annual base salary at the time he became permanently disabled until the
earliest of (i) the month in which the he returns to active employment, either
with the Company or otherwise, (ii) the end of the initial term of the
agreement, or the current renewal term, as the case may be, or (iii) the sixth
month after the date of the termination. Any such payments shall be reduced by
any amounts paid to Mr. Richard under any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company.

If
Mr. Richard is terminated for Cause, he shall be entitled to receive his base
salary through the date of termination and any non-forfeitable benefits earned
and payable to him under the terms of deferred compensation or incentive plans
maintained by the Company.

In
the event of a Change in Corporate Control, any restricted stock, stock options
or other awards granted to Mr. Richard shall become immediately vested in full
and, in the case of stock options, exercisable in full.  Additionally, if at
any time during the twelve (12) consecutive months following or six (6) months
prior to the occurrence of a Change in Corporate Control, Mr. Richard is
involuntarily terminated (other than for Cause) by the Company, he shall be
entitled to lump sum severance pay in an amount equal to the sum of (i) 50% of
his annual base salary in effect at the time of the Change in Corporate Control
plus (ii) 50% of the annual bonus paid to him with respect to the last fiscal
year ending prior to the Change in Corporate Control.

James
L. Kolassa. 
Mr. Kolassa's employment offer letter, dated April 23, 2004, provides for Mr. Kolassa
to serve as President of TBS and to receive a base salary of $100,000 per
year.  His employment is at-will.  Mr. Kolassa is entitled to an incentive
bonus based upon achieving certain growth targets for TBS' net revenue and net
income.

Pursuant
to the employment offer letter, the Company has agreed to grant Mr. Kolassa
options to purchase 1,500,000 shares of our common stock at $0.18 per share
(the "Option Shares").  The Option Shares will vest over a five year
period and may be exercised during the seven year period after vesting.  If Mr.
Kolassa's employment is terminated for any reason, all vested and unvested
options will be forfeited and cancelled if unexercised in the ninety day period
following the date of any such termination.

Mr.
Kolassa also is entitled to participate in any benefits plans maintained by the
Company for its executives or employees and is entitled to three weeks annual
vacation.  He is also entitled to be reimbursed for business expenses incurred
by him in promoting the Company's business

In
the event of a Change in Corporate Control, any stock options granted to Mr. Kolassa
shall become immediately vested in full and, in the case of stock options,
exercisable in full.

James
L. Campbell. Mr.
Campbell's employment agreement, dated as of February 17, 2004, as modified, provides
for Mr. Campbell to serve as the Co-CIO of TBS for a term of three years from
June 15, 2004.  The employment agreement provides that, the term of the
agreement shall automatically be extended for successive one year renewal
terms, provided that if either Mr. Campbell or TBS gives the other party at
least thirty days advance written notice of his or its intention to not renew
the agreement for an additional term, the agreement will terminate upon the
expiration of the current term.

The
employment agreement provides for Mr. Campbell to receive a base salary of $100,000
for the first year.  The Company will review Mr. Campbell's salary at annual
intervals, and may adjust his annual base salary from time to time as the Board
of Directors or its Compensation Committee deems to be appropriate, provided,
however, that the salary for the second and each succeeding year shall not be
less than 105% of the salary for the prior year.  Mr. Campbell is entitled to
an incentive bonus based upon the Company's gross margin

Mr.
Campbell also is entitled to participate in any benefits plans maintained by
the Company for its executives or employees and is entitled to three weeks
annual vacation.  He is also entitled to be reimbursed for business expenses
incurred by him in promoting TBS' business and to reimbursement of up to $2,500
per year in expenses for attending continuing education programs.

If
Mr. Campbell's employment is terminated for reasons other than death,
disability, "good reason", or voluntary termination by Mr. Campbell,
the Company will be obligated to make monthly payments to Mr. Campbell for each
month during the remaining term of the employment agreement.  Each monthly
payment shall be equal to one-twelfth (1/12th) of Mr. Campbell's annual base
salary, as in effect on the date of termination.

Stephen
A. Garner. 
Mr. Garner's employment agreement, dated as of February 17, 2004, as modified, provides
for Mr. Garner to serve as the Co-CIO of TBS for a term of three years from
June 15, 2004.  The employment agreement provides that, the term of the
agreement shall automatically be extended for successive one year renewal
terms, provided that if either Mr. Garner or TBS gives the other party at least
thirty days advance written notice of his or its intention to not renew the
agreement for an additional term, the agreement will terminate upon the
expiration of the current term.

The
employment agreement provides for Mr. Garner to receive a base salary of $100,000
for the first year.  The Company will review Mr. Garner's salary at annual
intervals, and may adjust his annual base salary from time to time as the Board
of Directors or its Compensation Committee deems to be appropriate, provided,
however, that the salary for the second and each succeeding year shall not be
less than 105% of the salary for the prior year.  Mr. Garner is entitled to an
incentive bonus based upon the Company's gross margin

Mr.
Garner also is entitled to participate in any benefits plans maintained by the
Company for its executives or employees and is entitled to three weeks annual
vacation.  He is also entitled to be reimbursed for business expenses incurred
by him in promoting TBS' business and to reimbursement of up to $2,500 per year
in expenses for attending continuing education programs.

If
Mr. Garner's employment is terminated for reasons other than death, disability,
"good reason", or voluntary termination by Mr. Garner, the Company
will be obligated to make monthly payments to Mr. Garner for each month during
the remaining term of the employment agreement.  Each monthly payment shall be
equal to one-twelfth (1/12th) of Mr. Garner's annual base salary, as in effect
on the date of termination.

OPTION GRANTS IN FISCAL 2004

The
following table provides information concerning grants of options to purchase
the Company's common stock that we made to each of the executive officers and
significant employees named in the summary executive compensation
table during the fiscal year ended December 31, 2004.  We did not grant stock
appreciation rights to these individuals during 2004.

| | ----------------------------------------------------------------------------------------------------
| | ----------------------------------------------------------------------------------------------------
| |                                                                                                     
| |                                                                                                     
| | Name                                                                                                
| | ----------------------                                                                              
| | K.
  Mason Conner                                                                                   
| | H.
  Jay Hill                                                                                       
| | James
  L. Kolassa                                                                                  
| | James
  L. Campbell                                                                                 
| | Stephen
  A. Garner                                                                                 
| | ----------------------------------------------------------------------------------------------------



FISCAL YEAR END OPTION VALUES AND EXERCISES

The
following table provides information with respect to the year-end value of
unexercised stock options for each of the executive officers and significant
employees named in the summary executive compensation table. The dollar values
of unexercised options are calculated by determining the difference between the
fair market value at fiscal year end of the common stock underlying the options
and the exercise price of the options. The fair value is $0.15 per share, the
per share price of our common stock on the OTCBB on December 31, 2004.

| | --------------------------------------------------------------------------------------------------- 
| | ----------------------------------------------------------------------------------------------------
| |                                                                                                     
| |                                                                                                     
| | Name                                                                                                
| | ----------------------                                                                              
| | K.
  Mason Conner                                                                                   
| | H.
  Jay Hill                                                                                       
| | James
  L. Kolassa                                                                                  
| | James
  L. Campbell                                                                                 
| | Stephen
  A. Garner                                                                                 
| | ----------------------------------------------------------------------------------------------------



STOCK OPTIONS

The Company has adopted an
equity incentive plan (the "2002 Plan") that authorizes the issuance of options
to acquire up to 28,000,000 shares of common stock, as amended, to employees
and certain outside consultants.   The 2002 Plan allows for the issuance of
either non-qualified or, subject to stockholder approval, incentive stock
options pursuant to Section 422 of the Internal Revenue Code. Options vest at
the discretion of the Board of Directors as determined at the grant date, but not
longer than a ten-year term.  Under the 2002 Plan, the exercise price of each
option shall not be less than fair market value on the date the option is
granted.  The number of options under the 2002 Plan available for grant at
December 31, 2004 was 10,816,532.

During 2004, the Company
granted to its employees options to purchase shares of its common stock under
the 2002 Plan as follows:  5,150,000 shares at $0.15 per share, 150,000 shares
at $0.17 per share, 2,990,000 shares at $0.18 per share, 10,000 shares at
$0.1875 per share, 25,000 shares at $0.19 per share, 35,000 shares at $0.20 per
share.   All options were issued above or at the fair market value on the dates
of grant and vest on various dates from the date of grant through October 2009.

Effective February 10, 2005,
the exercise price of options to purchase 1,860,000 shares of the Company's
common stock under the 2002 Plan at $0.15 per share that were issued in 2004
was reduced to $0.07 per share, in accordance with the related employment agreements,
in connection with the conversion of debt to common stock subsequent to year
end.  As a result, the Company will account for such options under variable
accounting.

Options to purchase 50,000
shares at $0.10 (the fair market value on the date of grant) were granted to a
non-employee consultant during 2003.  These options vested on February 28,
2004.

Options to purchase 3,710,000
shares of the Company's common stock under the 2002 Plan at per share prices
ranging from $0.10 to $0.1875 (above or at the fair market value on the dates
of grant) were issued to employees during the year ended December 31, 2003,
vesting on various dates from the date of grant through December 2008.

Options to purchase 833,030 shares of the Company's common
stock under the 2002 Plan at $0.1875 per share (above or at the fair market
value on the dates of grant) that were issued in 2002 were modified as to
vesting and expiration date during 2003 in connection with the retirement of
employees.

During 1997, the Board of
Directors of the Company adopted a stock option plan (the "1997 Plan") that
authorizes the issuance of options to acquire up to 5,000,000 shares of common
stock to employees and certain outside consultants.  The 1997 Plan allows for
the issuance of either non-qualified or incentive stock options pursuant to
Section 422 of the Internal Revenue Code. Options vest at the discretion of the
Board of Directors as determined at the grant date, but not longer than a
ten-year term.  Under the 1997 Plan, the exercise price of each option shall
not be less than 85 percent of fair market value on the date the option is
granted.  The number of options under the 1997 Plan available for grant at
December 31, 2003 was 2,089,798.

During 2004, 1,362,286
options under the 2002 Plan and 154,635 other options were cancelled due to
their expiration or the termination of employment.



BOARD
OF DIRECTOR COMPENSATION

Members
of our board of directors receive no cash compensation for services as a
director or for attendance at or participation in meetings. Directors receive
options to purchase common stock as compensation for services as a director. In
past years, directors have received options to purchase the Company's common
stock in consideration for services as a director. There has been no
determination made as to the number and exercise price of options, if any, that
will be issued to either K. Mason Conner or H. Jay Hill for service during
terms following the term that expired on October 5, 2001.During 2004,
our Board of Directors has approved a
compensation arrangement with J. Thomas Zender, a Director.  Pursuant to this
arrangement, we have agreed to issue options to purchase 325,000 shares of our
common stock at $0.15 per share to Mr. Zender in consideration for his past
services as a Director and options to purchase 175,000 shares of our common
stock at $0.15 per share in consideration for his services as a Director during
the current year.  Directors
are reimbursed for out-of-pocket expenses incurred by them in connection with
attending meetings. All directors have options to purchase shares of the
Company's Common Stock as set forth in the table in Item 11 of this Annual
Report on Form 10-KSB. The Company has no other arrangements regarding
compensation for services as a director.



AUDIT
COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT

Because
our board of directors is comprised of only three members, none of which are considered
to be independent within the meaning of Item 7(d)(3)(iv) of Schedule 14A of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), we
have determined that it is impractical to form an audit committee of the board
of directors.  The entire board of directors of the Company acts as the audit
committee as specified in section 3(a)(58)(B) of the Exchange Act.  In
addition, we do not have an audit committee financial expert as defined by Item
401(e) of Regulation S-B of the Exchange Act at this time because we believe
that we are not in a position to attract suitable candidates due to insufficient
capital resources.  In addition, we are not required by the OCTBB to have
either an audit committee or an audit committee financial expert.



CODE
OF ETHICS

The
Company has adopted a written Code of Ethics designed to deter wrongdoing and
promote honest and ethical conduct, full, fair and accurate disclosure,
compliance with laws, prompt internal reporting and accountability to adherence
to the Code of Ethics. This Code of Ethics has been filed with the Securities
and Exchange Commission as Exhibit 14.1 to the Annual Report on Form 10-KSB filed
on March 29, 2004 and is posted on the Company's Internet website (www.villageedocs.com). 
Any amendments or waivers to this Code of Ethics with respect to the Company's
principal executive officer, principal financial officer, principal accounting
officer or controller (or persons performing similar functions) will be posted
on our web site. One may also obtain, without charge, a copy of this Code of Ethics by contacting the Company's
Investor Relations Department at (714) 368-8705.

---

ITEM
11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The
following table sets forth certain information with respect to the beneficial
ownership of shares of the Company's Common Stock owned as of February 28, 2005
beneficially by (i) each person who beneficially owns more than 5% of the
outstanding Common Stock, (ii) each director of the Company, (iii) the
President and Chief Executive Officer of the Company, the executive officers and
significant employees of the Company whose cash and non-cash compensation for
services rendered to the Company for the year ended December 31, 2004 exceeded
$100,000), and (iv) directors, executive officers, and significant employees as
a group:

| | --------------------------------------------------------------------------------- |                            
| | --------------------------------------------------------------------------------- | ---------------------------
| | Name of Beneficial                                                                | Amount and Nature of       
| | Owner (1)                                                                         | Beneficial Ownership
  (2) 
| | ----------------------------------                                                | ---------------------------
| | James
  Townsend (5)                                                              | 11,097,857                 
| |                                                                                   |                            
| | C.
  Alan Williams (6)                                                            | 72,662,139                 
| |                                                                                   |                            
| | K.
  Mason Conner (7)                                                             | 2,399,655                  
| |                                                                                   |                            
| | J.
  Thomas Zender (8)                                                            | 1,126,927                  
| |                                                                                   |                            
| | H.
  Jay Hill (9)                                                                 | 1,289,427                  
| |                                                                                   |                            
| | James
  L. Kolassa (10)                                                           | 300,000                    
| |                                                                                   |                            
| | James
  L. Campbell (11)                                                          | 5,260,000                  
| |                                                                                   |                            
| | Stephen
  A. Garner (12)                                                          | 5,260,000                  
| |                                                                                   |                            
| | All
  directors, executive officers,                                              |                            
| | and
  significant employees as a                                                  |                            
| | group
  (7 persons)                                                               | 16,098,311                 
| | --------------------------------------------------------------------------------- |                            

(1)  The address of each individual is in care
of the Company.

(2)  Represents sole voting and investment power
unless otherwise indicated.

(3)  Based on approximately 76,369,213 shares of
the Company's Common Stock outstanding at February 28, 2005,  plus, as to each
person listed, that  portion of Company Common Stock subject to outstanding
options, warrants, and convertible debt which may be exercised or converted by
such person, and as to all directors and executive officers as a group,
unissued shares of  Company Common Stock as to which the members of such group
have the right to acquire beneficial ownership upon the exercise of stock
options or  warrants, or conversion of convertible debt within the next  60
days.

(4)  Excludes 19,822,599 shares reserved for
issuance under outstanding options and warrants.

(5)  Includes debt convertible to 7,665,746
shares of Common Stock at $0.10 per share, options to acquire 45,632 shares of
Common Stock at $2.50 per share, and options to purchase 101,795 shares of
Common Stock at $0.1875 per share.

(6)  Includes $1,055,512 of debt convertible to 9,008,968
shares of Common Stock at $0.12 per share (85% of estimated fair market value
as of February 28, 2005) and warrants to acquire 5,000,000 shares at $0.10 per
share.

(7)  Includes options to acquire 600,000 shares
of Common Stock at $0.25 per share, options to acquire 45,632 shares at $2.50
per share, and options to acquire 1,719,658 shares at $0.1875 per share.

(8) Includes options to acquire 290,000 shares
of Common Stock at $0.20 per share, options to acquire 45,632 shares at $2.50
per share, and options to acquire 551,295 shares at $0.1875 per share.

(9) Includes options to acquire 200,000 shares
of Common Stock at $0.20 per share, options to acquire 45,632 shares at $2.50
per share, options to acquire 411,795 shares at $0.1875 per share, options to
acquire 300,000 shares at $0.18 per share, and options to acquire 200,000
shares at $0.10 per share.

(10) Includes options to acquire 300,000 shares
of Common Stock at $0.18 per share.

(11)  Includes debt convertible to 1,960,000
shares of Common Stock at $0.102 per share

(12)  Includes debt convertible to 1,960,000
shares of Common Stock at $0.102 per share

Securities Authorized for Issuance Under Equity
Compensation Plans

The following provides information, as of
December 31, 2004, concerning compensation plans (including individual
compensation arrangements) under which equity securities of the Company are
authorized for issuance.

| |                                  | (a)                                                                                           | (b)                                                                            | (c)                                                                                                                                                |           
| | -------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------- | ----------
| |                                  | ---------------------                                                                         | -------------------                                                            | ---------------------                                                                                                                              |           
| | Plan Category                    | Number of securities
  to be issued upon exercise of outstanding options, warrants and rights | Weighed-average
  exercise price of outstanding options, warrants
  and rights | Number of securities
  remaining available for future issuances under equity compensation plans
  (excluding securities reflected in
  column (a)) |           
| | --------------------------       | --------------------                                                                          | -----------------                                                              | --------------------                                                                                                                               |           
| | Equity compensation    plans     |                                                                                               |                                                                                |                                                                                                                                                    |           
| | approved by security    holders  | 20,093,670                                                                                    |                                                                                | $ 
           0.41                                                                                                                                 | 12,906,330
| |                                  |                                                                                               |                                                                                |                                                                                                                                                    |           
| | Equity compensation    plans not |                                                                                               |                                                                                |                                                                                                                                                    |           
| | approved by security    holders  | 5,016,000                                                                                     |                                                                                | $ 
           0.10                                                                                                                                 | --        
| |                                  | ----------------------                                                                        | ----------------                                                               | --------------------                                                                                                                               |           
| | Total                            | 25,109,670                                                                                    |                                                                                | $ 
           0.35                                                                                                                                 | 12,906,330

For a complete description of the Company's
equity compensation plans, please refer to Note 8 of our audited financial
statements as of December 31, 2004, which are filed as Exhibit 99.1 hereto.

---

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

During
the year ended December 31, 2004, the Company borrowed $345,000 from C. Alan
and Joan P. Williams and issued convertible promissory notes bearing interest
at 10 percent per annum (the "Notes").   The Notes are secured by a
security interest in all of the Company's assets.  The notes and accrued
interest are due at the earlier of one of three events: 1) October 31, 2005; 2)
acquisition of controlling interest in the Company by a third party; or 3) the
Company achieves equity financing of a minimum of $3,000,000.  If the Company
is acquired, the principal and accrued interest on the Notes, as modified, are
convertible into shares of the Company's common stock at the lower of $2.50 per
share or the price paid per share by the acquirer.  In addition, the principal
and accrued interest on the Notes, as modified, are convertible into shares of
the Company's common stock at a conversion price equal to the lower of $0.07
per share or the average of the Company's common stock closing bid price on the
OTCBB, NASDAQ or other established securities exchange or market for the ten
(10) consecutive trading days prior to the date Mr. or Mrs. Williams delivers
written notice of his or her conversion election to the Company.

On
February 17, 2004, the Company issued a $1,700,000 secured convertible
promissory note for cash.  The note was issued to a related party, C. Alan and
Joan P. Williams, and bears interest at 10 percent per annum.  The note and
accrued interest are due at the earlier of one of three events: 1) October 31,
2007; 2) acquisition of controlling interest in the Company by a third party;
or 3) the Company achieves equity financing of a minimum of $3,000,000.  If the
Company is acquired, the principal and accrued interest on the note are
convertible into shares of the Company's common stock at the lower of $2.50 per
share or the price paid per share by the acquirer.  In addition, the principal
and accrued interest on the note are convertible into shares of the Company's
common stock at a conversion price equal to eighty five percent of average of
the Company's common stock closing bid price on the OTCBB, NASDAQ or other
established securities exchange or market for the ten (10) consecutive trading
days prior to the date Mr. and Mrs. Williams deliver written notice of their
conversion election to the Company.  As an inducement for Mr. and Mrs. Williams
to provide the loan, the Company agreed to issue them a warrant to purchase
5,000,000 shares of the Company's restricted common stock at $0.10 per share exercisable
until February 17, 2009.

In
connection with the acquisition of TBS, the Company issued a $300,000
convertible promissory note to Stephen A. Garner and a $300,000 convertible
promissory note to James L. Campbell (the "TBS Notes").  Each of the
TBS Notes bears interest at 5 percent per annum and is due and payable in three
equal annual installments of  $100,000, with the first installment paid in full
during February 2005 and subsequent installments due on February 17, 2006 and
February 17, 2007.  The TBS Notes are secured by a Stock Pledge Agreement and a
Security Agreement.  In addition, Messrs. Garner and Campbell have the right to
convert the balance of unpaid principal and interest of the TBS Notes into
shares of the Company's common stock at the rate of 9.8 shares of Common Stock
for each $1.00 of principal and interest to be converted.

During
the year ended December 31, 2003, the Company borrowed $1,132,000 from C. Alan
and Joan P. Williams and issued convertible promissory notes bearing interest
at 10 percent per annum.  At December 31, 2004, the outstanding principal
balance of convertible secured promissory notes payable (the "Notes")
to Mr. and Mrs. Williams was $3,927,000.  The Notes are secured by a security
interest in all of the Company's assets.  The notes and accrued interest are
due at the earlier of one of three events: 1) October 31, 2005; 2) acquisition
of controlling interest in the Company by a third party; or 3) the Company
achieves equity financing of a minimum of $3,000,000.  If the Company is
acquired, the principal and accrued interest on the Notes, as modified, are
convertible into shares of the Company's common stock at the lower of $2.50 per
share or the price paid per share by the acquirer.  The principal and accrued
interest on $530,000 of these convertible promissory notes, as modified, are
convertible into shares of the Company's common stock at a conversion price
equal to the lower of $2.50 per share or the average of the Company's common
stock closing bid price on the OTCBB, NASDAQ or other established securities
exchange or market for the ten (10) consecutive trading days prior to the date
Mr. and Mrs. Williams deliver written notice of their conversion election to
the Company.  The principal and accrued interest on $1,352,000 of these
convertible promissory notes issued between October 30, 2002 and December 31,
2003 are convertible into shares of the Company's common stock at a conversion
price equal to the lower of $0.07 per share (below the fair market value on the
date of issuance) or the average of the Company's common stock closing bid
price on the OTCBB, NASDAQ or other established securities exchange or market
for the ten (10) consecutive trading days prior to the date Mr. and Mrs.
Williams deliver written notice of their conversion election to the Company.

TBS
leases the building that houses substantially all of its operations from
Perimeter Center Partners, which is controlled by James L. Campbell and Stephen
A. Garner.  Messrs. Campbell and Garner are the former owners of TBS and are
currently significant employees of the Company.  The lease was entered into in
connection with the Company's acquisition of TBS and is a triple-net lease
expiring in January 2009 at a cost of $6,200 per month.

---

ITEM
13.  EXHIBITS



|              |                                                                                                                                                                                                                                                                                                                                               
|------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  No. | Description                                                                                                                                                                                                                                                                                                                                   
|2.1           | Agreement
  and Plan of Merger dated January 31, 2004 by and among VillageEDOCS,
  VillageEDOCS Merger Sub, Inc., Tailored Business Systems, Inc., Stephen A.
  Garner, and James L. Campbell previously filed as Exhibit 2.1 to the
  Company's Current Report on Form 8-K filed on February 18, 2004 and
  incorporated herein by reference.
|2.2           | Plan
  of Internal Restructuring previously filed as Exhibit B to the Company's
  Schedule 14C Information Statement filed on July 23, 2004 and incorporated
  herein by reference.                                                                                                                                                           
|3.1           | Articles
  of Incorporation, as amended.  Previously filed with the Company's Form 10-SB
  filed on August 29, 2000.                                                                                                                                                                                                                          
|3.2           | By-laws. 
  Previously filed with the Company's Form 10-SB filed on August 29, 2000.                                                                                                                                                                                                                                                          
|3.3           | Article
  of Amendment to Articles of Incorporation to increase authorized number of
  common shares.  Previously filed with the Company's 14C Information Statement
  filed on July 23, 2004.                                                                                                                                                
|4.1           | Letter Agreement dated July 30, 2002
  by and between the Company, C. Alan Williams, and Joan P. Williams previously
  filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-QSB for the
  period ended June 30, 2002 and incorporated herein by reference.                                                                       
|4.2           | Promissory
  Note Modification Agreement dated July 15, 2002 by and between the Registrant
  and James W. Townsend previously filed as Exhibit 4.1 to the Company's
  Current Report on Form 8-K filed on July 2, 2002 and incorporated herein by
  reference.                                                                                
|4.3           | Form of Unsecured Convertible
  Promissory Note. Previously filed as Exhibit 4.5 to the Registrant's
  Quarterly Report on Form 10-QSB filed with the Securities and Exchange
  Commission on May 15, 2002 and incorporated herein by reference.                                                                                              
|4.4           | Form
  of Convertible Secured Promissory Note. Previously filed as Exhibit 4.6 to
  the Registrant's Quarterly Report on Form 10-QSB filed with the Securities
  and Exchange Commission on May 15, 2002 and incorporated herein by reference.                                                                                                
|4.5           | 2002
  Equity Incentive Plan dated as of January 30, 2002.  Previously filed as Exhibit 4.1 to the Registrant's
  Quarterly Report on Form 10-QSB filed with the Securities and Exchange
  Commission on May 15, 2002 and incorporated herein by reference.                                                                                   
|4.6           | Form
  of Stock Option Agreement.  Previously filed as Exhibit 4.2 to the
  Registrant's Quarterly Report on Form 10-QSB filed with the Securities and
  Exchange Commission on May 15, 2002 and incorporated herein by reference.                                                                                                            
|4.7           | Promissory
  Note Modification Agreement dated May 9, 2002 by and among the Company, Joan
  P. Williams and C. Alan Williams.  Previously filed as Exhibit 4.3 to the
  Registrant's Quarterly Report on Form 10-QSB filed with the Securities and
  Exchange Commission on May 15, 2002 and incorporated herein by reference.                
|4.8           | Security
  Agreement dated May 9, 2002 by and among the Company, Joan P. Williams and C.
  Alan Williams.  Previously filed as Exhibit 4.4 to the Registrant's Quarterly
  Report on Form 10-QSB filed with the Securities and Exchange Commission on
  May 15, 2002 and incorporated herein by reference.                                    
|4.9           | Promissory
  Note to Stephen A. Garner dated February 17, 2004 previously filed as Exhibit 4.1 to the Company's Current
  Report on Form 8-K filed on February 18, 2004 and incorporated herein by
  reference.                                                                                                                               
|4.10          | Promissory
  Note to James L. Campbell dated February 17, 2004 previously filed as Exhibit 4.2 to the Company's Current
  Report on Form 8-K filed on February 18, 2004 and incorporated herein by
  reference.                                                                                                                               
|4.11          | Guaranty by Tailored
  Business Systems, Inc. to Stephen A. Garner dated February 17, 2004 previously filed as
  Exhibit 4.3 to the Company's Current Report on Form 8-K filed on February 18,
  2004 and incorporated herein by reference.                                                                                                   
|4.12          | Guaranty by Tailored
  Business Systems, Inc. to James L. Campbell dated February 17, 2004 previously filed as
  Exhibit 4.4 to the Company's Current Report on Form 8-K filed on February 18,
  2004 and incorporated herein by reference.                                                                                                   
|4.13          | Form of Security Agreement
  dated February 17, 2004 by and between Tailored Business Systems, Inc. and
  Stephen A. Garner
  previously filed as Exhibit 4.5 to the Company's Current Report on Form 8-K
  filed on February 18, 2004 and incorporated herein by reference.                                                                  
|4.14          | Form of Security Agreement
  dated February 17, 2004 by and between Tailored Business Systems, Inc. and
  James L. Campbell
  previously filed as Exhibit 4.6 to the Company's Current Report on Form 8-K
  filed on February 18, 2004 and incorporated herein by reference.                                                                  
|4.15          | Registration Rights
  Agreement dated February 17, 2004 by and between VillageEDOCS and Stephen A.
  Garner
  previously filed as Exhibit 4.7 to the Company's Current Report on Form 8-K
  filed on February 18, 2004 and incorporated herein by reference.                                                                                  
|4.16          | Registration Rights
  Agreement dated February 17, 2004 by and between VillageEDOCS and James L.
  Campbell
  previously filed as Exhibit 4.8 to the Company's Current Report on Form 8-K
  filed on February 18, 2004 and incorporated herein by reference.                                                                                  
|4.17          | Form of Stock Pledge
  Agreement dated February 17, 2004 by and between Tailored Business Systems,
  Inc. and Stephen A. Garner previously filed as Exhibit 4.9 to the Company's Current
  Report on Form 8-K filed on February 18, 2004 and incorporated herein by
  reference.                                                              
|4.18          | Form of Stock Pledge
  Agreement dated February 17, 2004 by and between Tailored Business Systems,
  Inc. and James L. Campbell previously filed as Exhibit 4.10 to the Company's Current
  Report on Form 8-K filed on February 18, 2004 and incorporated herein by
  reference.                                                             
|10.1          | Consulting
  and Other Services agreement dated January 28, 2003 by and between the
  Company and Paul Allen.  Previously filed as Exhibit 4.8 to the Company's
  Registration Statement on Form S-8 filed with the Securities and Exchange
  Commission on January 29, 2003 and incorporated herein by reference.                            
|10.2          | Employment
  Offer Letter dated April 23, 2004 by and between Tailored Business Systems,
  Inc. and James L. Kolassa.*                                                                                                                                                                                                                        
|10.3          | Debt
  settlement agreement dated January 28, 2003 by and between the Company and
  James R. Spoerl.  Previously filed as Exhibit 4.9 to the Company's
  Registration Statement on Form S-8 filed with the Securities and Exchange
  Commission on January 29, 2003 and incorporated herein by reference.                                     
|10.4          | Employment Agreement dated
  February 17, 2004 by and between Tailored Business Systems, Inc. and Stephen
  A. Garner previously
  filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on
  February 18, 2004 and incorporated herein by reference.                                                                       
|10.5          | Employment Agreement dated
  February 17, 2004 by and between Tailored Business Systems, Inc. and James L.
  Campbell previously
  filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed on
  February 18, 2004 and incorporated herein by reference.                                                                       
|10.6          | General Release and
  Noncompetition Agreement dated February 17, 2004 by Stephen A. Garner in
  favor of Tailored Business Systems, Inc. previously filed as Exhibit 10.3 to the
  Company's Current Report on Form 8-K filed on February 18, 2004 and
  incorporated herein by reference.                                                   
|10.7          | General Release and
  Noncompetition Agreement dated February 17, 2004 by James L. Campbell in
  favor of Tailored Business Systems, Inc. previously filed as Exhibit 10.4 to the
  Company's Current Report on Form 8-K filed on February 18, 2004 and
  incorporated herein by reference.                                                   
|10.8          | Lease Agreement dated
  February 17, 2004 by and between Perimeter Center Partners and Tailored
  Business Systems, Inc. previously
  filed as Exhibit 10.5 to the Company's Current Report on Form 8-K filed on
  February 18, 2004 and incorporated herein by reference.                                                                    
|10.9          | Employment Agreement dated June
  10, 2004 by and between the Company and K. Mason Conner previously filed as
  Exhibit C to the Company's Schedule 14C Information Statement filed on July
  23, 2004 and incorporated herein by reference.                                                                                                  
|10.10         | Employment Agreement dated June
  10, 2004 by and between the Company and H. Jay Hill previously filed as
  Exhibit D to the Company's Schedule 14C Information Statement filed on July
  23, 2004 and incorporated herein by reference.                                                                                                      
|10.11         | Employment Agreement dated June
  10, 2004 by and between the Company and Michael Richard previously filed as Exhibit
  E to the Company's Schedule 14C Information Statement filed on July 23, 2004
  and incorporated herein by reference.                                                                                                  
|14.1          | Code
  of Ethics.  Previously filed as Exhibit 14.1 to the Company's Annual Report
  on Form 10-KSB filed on March 29, 2004 and incorporated herein by reference                                                                                                                                                                              
|21.1          | Subsidiaries
  of the Registrant.*                                                                                                                                                                                                                                                                                                            
|23.1          | Consent
  of Independent Registered Public Accounting Firm.*                                                                                                                                                                                                                                                                                  
|31.1          | Certification
  Under Section 302 of The Sarbanes-Oxley Act of 2002 signed and dated March 31,
  2005 by K. Mason Conner, Chief Executive Officer.*                                                                                                                                                                                           
|31.2          | Certification
  Under Section 302 of The Sarbanes-Oxley Act of 2002 signed and dated March 31,
  2005 by Michael A. Richard, Chief Financial Officer.*                                                                                                                                                                                        
|32.1          | Certification
  Pursuant To 18 U.S.C. §1350, As Adopted Pursuant To Section 906 of the
  Sarbanes-Oxley Act of 2002 signed and dated March 31, 2005 by K. Mason
  Conner, Chief Executive Officer.**                                                                                                                                          
|32.2          | Certification
  Pursuant To 18 U.S.C. §1350, As Adopted Pursuant To Section 906 of the
  Sarbanes-Oxley Act of 2002 signed and dated March 31, 2005by Michael A. Richard, Chief Financial Officer.**                                                                                                                                          
|99.1          | VillageEDOCS
  Financial Statements For The Fiscal Years Ended December 31, 2004 and 2003 together
  with Report of Independent Registered Public Accounting Firm.*                                                                                                                                                                           
|              |                                                                                                                                                                                                                                                                                                                                               
|              |                                                                                                                                                                                                                                                                                                                                               

* 
           Filed herewith.

**           Furnished
herewith.





---

ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The
following table sets forth fees billed to us by our auditors during the fiscal
years ended December 31, 2004 and 2003 for: (i) services rendered for the audit
of our annual financial statements and the review of our quarterly financial
statements, (ii) services by our auditors that are reasonably related to the
performance of the audit or review of our financial statements and that are not
reported as Audit Fees, including procedures related to our acquisition of TBS (iii)
services rendered in connection with tax compliance, tax advice, and tax
planning, and (iv) all other fees for services rendered.  "All Other
Fees" consisted of fees related to the issuance of a consent for our S-8
Registration Statement filed on January 29, 2003, proxy, and press releases.

| |       |                      | 2004                      |  | 2003                         
| | ----- | -------------------- | ------------------------- |  | -----------------------------
| |       |                      | ------------------------- |  | -----------------------------
| | (i)   | Audit
  Fees         | $  76,000                 |  | $  50,000                    
| | (ii)  | Audit
  Related Fees | 16,000                    |  | 4,000                        
| | (iii) | Tax
  Fees           | 4,000                     |  | 3,000                        
| | (iv)  | All
  Other Fees     | 2,000                     |  | 5,000                        
| |       |                      | ------------------------  |  | -----------------------------
| |       | Total                | $  98,000                 |  | $  62,000                    
| |       |                      | ==============            |  | =================            



---

SIGNATURES

In accordance with
Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.

| | VillageEDOCS                
| | ----------------------------
| | (Registrant)                
| |                             
| | VillageEDOCS                
| |                             
| | By:  /s/ Michael A. Richard 
| | Michael A. Richard          
| | Chief Financial Officer and 
| | Principal Accounting Officer
| |                             
| | Date:  March 31, 2005       

Pursuant to the requirements of
the Securities Act of 1933, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.

| | SIGNATURE                               | TITLE                        | DATE                                 
| | --------------------------------------- | ---------------------------- | -------------------------------------
| |                                         |                              |                                      
| |                                         |                              |                                      
| | /s/ K. Mason Conner                     |                              | March 31, 2005                       
| | --------------------------------------  |                              | ------------------------------------ 
| | K. Mason Conner                         | Director,                    |                                      
| |                                         | Chief Executive Officer      |                                      
| |                                         |                              |                                      
| | /s/ Michael A. Richard                  |                              | March
  31, 2005                     
| | --------------------------------------- |                              | -------------------------------------
| | Michael A. Richard                      | Chief Financial Officer,     |                                      
| |                                         | Principal Accounting Officer |                                      
| |                                         |                              |                                      
| | /s/ J. Thomas Zender                    |                              | March
  30, 2005                     
| | --------------------------------------- |                              | -------------------------------------
| | J. Thomas Zender                        | Director,                    |                                      
| |                                         | Chairman of the Board        |                                      
| |                                         |                              |                                      
| | /s/ H. Jay Hill                         |                              | March
  30, 2005                     
| | --------------------------------------- | Executive Vice President,    | -------------------------------------
| | H. Jay Hill                             | Director                     |