ALBUQUERQUE, N.M., Jan. 4 /PRNewswire-FirstCall/ -- New Mexico Software, Inc. (OTC:NMXS) (BULLETIN BOARD: NMXS) , http://www.nmxs.com/ , a leading provider of web-based digital and paper management solutions, issued the following letter to shareholders from CEO Dick Govatski: To Our Shareholders and Investors, I am pleased to report that we made excellent and important progress in 2005. As we look forward, we have every reason to believe our results in 2006 will be even stronger in terms of strengthening our company financially and positioning us for future success. Last year was a critical point in making the transition from a total research and development operation to a revenue-generating company. We consolidated our product lines, which now include Roswell, Digital Filing Cabinet (DFC3), XR-EXpress, I-MedCon and Santa Fe Linux. We decided to forgo additional product development in SoxTrac, Trinity Mothership and our consumer products such as Taos and White Sands in order to concentrate on our medical and server products where we believe we can get a better return on our use of capital. However, the consumer product development has not been wasted. We are integrating what we have developed into our server technology, providing significant enhancements. We also see other future possibilities that will provide us with valuable differentiation from other information technology products. As part of the shifting strategy, we brought in top management to oversee our server and medical product lines. In fact, we are starting 2006 with more salesmen than engineers for the first time in our history. Our office in Chihuahua, Mexico is beginning to make strides in sales south of the border. The addition of three new salesmen in our Albuquerque office is going to affect our top-line revenue in a positive way. We are dividing the U.S. market into six geographic areas with a salesman responsible for all New Mexico Software products in each area. Eventually, we'll have separate sales teams for our medical and server divisions. We don't have our 2005 year-end financial results yet, but as we previously reported, for the nine-month period ended Sept. 30, 2005, revenue was up 29.3% to $1,274,000 from $985,000 reported in the first nine months of 2004. We had a net loss of $241,000, or $0.01 per fully diluted share, compared with a net loss of $136,000 or $0.00 per fully diluted share, in the comparable period in 2004. Early indications are that our fourth quarter pre- audit revenue will be somewhat lower than the average of the first nine months. The revenue for the year will be at just under $1.5 million. We will report the Q4 numbers on or before April 15. On the balance sheet side, our improving cash position enabled us to make significant strides in reducing our bank debt and other payables, including a major reduction of back taxes owed to the IRS. Our goal is to eliminate our bank debt within the next several months. We expect to resolve our tax issues with an approved IRS plan by this summer. Our improving cash position is also allowing us to increase product inventory of scanners, servers, medical equipment and storage devices. This means quicker sales turnaround and setup of new customers. We are preparing to sign our first national distributor to handle the Digital Filing Cabinet. We've embarked on a strong national advertising campaign, and we held our first investor marketing program in San Diego. We intend to have more events to introduce our company and our products to investors and potential customers in 2006. At our annual shareholders' meeting in October, stockholders voted unanimously to change the name of our company to New Mexico Software, Inc. from NMXS.com, Inc. Consequently, in the next few weeks, our stock-trading symbol will change. We were also pleased with the addition of Frank Reidy to our board of directors, which became official at the meeting. He is helping us in many different areas to grow the company. Although I don't believe our current stock price accurately reflects the value of our enterprise, I am encouraged that the stock is trading at significantly higher volumes. In December 2004, our stock traded 1,650,256 shares. Last month our volume was up significantly to 5,018,266 shares traded. As our company's financial position continues to improve, we expect the market valuation to match the improved results. Several investment analysts have predicted gains in tech stock prices in 2006 following five years of depressed share price levels. Businesses are being challenged by higher commodity and raw material prices, as well as demands for higher salaries. That should increase the need for information system technologies like ours, which will provide our customers with higher productivity and improved ROIs. We believe New Mexico Software is in an advantageous position to capitalize on these market trends with our Digital Filing Cabinet and other server technologies. Even as we strengthen our sales departments, we are maintaining our edge with continued research and development. Our vice president for technology and product development is creating a new series of products based on customer workflow requirements. In early January, we are bringing in a new director of product management to oversee engineering and customer service. Our biggest job of all in 2006, however, will be to add new customers and revenue. The bottom line is that I'm looking forward to a terrific 2006 for New Mexico Software. I greatly appreciate the ongoing support of our shareholders and employees who will make this possible. We will continue to work hard to provide good returns for all concerned. Richard F. Govatski CEO and President About New Mexico Software New Mexico Software is a leading provider of information management solutions that significantly improve the interface between the paper world and the digital world, facilitating a true paperless environment. It is the only public company providing web-based integrated services for individuals and companies, large or small, which allows full access to data from anywhere in an easy-to-use, familiar browser environment at an affordable price. For more information, visit http://www.nmxs.com/ or contact Dick Govatski, President and CEO, at (505) 255-1999 or . An investment profile on New Mexico Software may be found at http://www.hawkassociates.com/nms/profile.htm . For an online investor relations kit, go to http://www.hawkassociates.com/ or http://www.americanmicrocaps.com/ . For more investor-related questions, contact Frank Hawkins, Hawk Associates, at (305) 451-1888 or . The foregoing press release contains forward-looking statements, including statements regarding the company's expectation of its future business. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the company's control. Actual results could differ materially from these forward-looking statements. DATASOURCE: New Mexico Software, Inc. CONTACT: Frank Hawkins, Hawk Associates, +1-305-451-1888, or , for New Mexico Software Web site: http://www.nmxs.com/ http://www.hawkassociates.com/ http://www.americanmicrocaps.com/ http://www.hawkassociates.com/nms/profile.htm

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