Imaginon Announces Preliminary Financial Results for First Quarter 2001.

Business Editors & Technology Writers

SAN CARLOS, Calif.--(BUSINESS WIRE)--May 14, 2001

Investor telephone conference call scheduled for 5:00PM EDT 

on May 23, 2001 to discuss the Company's financial results,

recent subsidiary sale, and future business development plans.

Imaginon, Inc. (OTCBB: IMON) (www. imaginon.com) today announced preliminary financial results for the Q1 2001 reporting period ended March 31, 2001. Final results for the quarter may change prior to the Company's 10-QSB filing with the Securities and Exchange Commission. The Company today also announced that it has scheduled an investor telephone conference call, and simultaneous Web cast, for 5:00PM EDT on May 23, 2001 to discuss the Company's financial results, recent subsidiary sale, and future business development plans.

According to Imaginon Chief Executive Officer David Schwartz, Imaginon achieved net revenue for the quarter of $109,132, compared to net revenue of $76,912 in the Q1 2000 period. Imaginon's net loss for the Q1 2001 quarter was $1,486,613, down from a net loss of $2,029,341 in the first quarter of 2000. Including dividends on the Company's Series G convertible preferred stock, the net loss applicable to common shareholders for the first quarter of 2001 was $1,524,135 compared to $2,266,008 in the first quarter of 2000, which included amortization of the discount and a redemption premium related to the Company's Series F convertible preferred stock. First quarter 2001 results also include a charge of approximately $500,000 primarily reflecting a write-off of the remaining goodwill associated with Imaginon's March, 1999 acquisition of INOW. Subsequent to the end of the first quarter, the Company no longer considered the INOW subsidiary essential to its current business strategy and INOW was sold earlier this month.

Commenting on the preliminary financial results, as well as recent developments at the Company, Imaginon Chief Financial Officer Jim Newcomb stated that the Company was pleased that its cost reduction efforts had enabled Imaginon to substantially reduce losses as compared to the prior year. "Imaginon is responding aggressively to the challenges presented by the current economic climate. The Company has taken the painful but necessary steps required to reduce its burn rate by one-third, year over year. At the same time, the Company is focusing on its core technology, intends to spin off promising new technologies into stand-alone companies that can enhance long-term shareholder value, and is divesting itself of non-core business assets. We believe that these steps will help strengthen Imaginon in the long-term."

The May 23, 2001 investor conference call, which will be simultaneously broadcast over the Internet by Vcall, is open for interactive participation by the first 100 individuals who call before 5:00 PM on the day of the call. From within the United States, individuals must call 1-800-966-6338. From outside the United States, individuals must call 1-415-217-0050. Once the call is placed, interested participants should hold for the operator and request access to the "Imaginon Town Meeting."

Investors and other interested parties who wish to monitor the conference call in listen-only mode may do so over the Internet through Vcall at http://www.vcall.com. To monitor the conference call, individuals should go to the Vcall Web site at least 15 minutes before the call to register, download and install any necessary audio software. For those who cannot listen to the live broadcast or participate by telephone, a replay will be available shortly after the call at the Vcall Web site and an audio transcript will be available the following week at http://www.imaginon.com.

Imaginon, Inc. is an information technology company focused on developing and marketing broadband and wireless interactive Internet and intranet software systems. ImaginVideo(TM), the company's lead product, is a client-server application for the delivery and management of interactive video over TCP/IP networks. The company's objective is to become the leader in data retrieval, processing and presentation software.

ImaginVideo is a trademark of Imaginon and is protected under U.S. Patents.

Except for the historical information presented herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995, or by the Securities and Exchange Commission in its rules, regulations, and releases. These forward- looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks include acceptance of Imaginon software by developers and users, the successful development of competitive software to Imaginon's, competitive pricing pressures for Imaginon software and services, and the availability of financing to complete management's plans and objectives. In addition, other risks are detailed in the Company's periodic reports and in its Form S-3 registration statement declared effective by the Securities and Exchange Commission on February 16, 2001. These forward-looking statements speak only as of the date hereof. The Company disclaims any intent or obligation to update these forward-looking statements.