FOR IMMEDIATE RELEASE

Contact: Bob Griffin, Griffin Public Relations & Marketing
(212) 481-3456
Bgriffin@griffinpr.com

HEARING SCHEDULED FOR POTENTIAL DELISTING OF IMAGINON FROM NASDAQ SMALLCAP MARKET

SAN CARLOS, CALIFORNIA, January 9, 2001 -- IMAGINON, Inc. (NASDAQ: IMON) (www.imaginon.com) today announced that a hearing has been scheduled for January 25, 2001 concerning ImaginOn’s potential delisting from the Nasdaq SmallCap Market for its failure to maintain a minimum bid price of $1.00 per share of common stock.

ImaginOn appealed the September 26, 2000 Staff determination and requested a hearing before the Listing Qualifications Panel authorized by The Nasdaq Stock Market Board of Directors pursuant to Nasdaq Marketplace Rule 4800 Series. While the hearing request has stayed the delisting of ImaginOn’s common stock, if the Panel denies ImaginOn’s appeal of the determination, ImaginOn’s common stock will be delisted without further notification.

Various factors, including the economy and market conditions, have caused the bid price of ImaginOn’s common stock to fall below $1.00 per share, which is the minimum bid price for continued inclusion on the Nasdaq SmallCap Market.

Chief Executive Officer David Schwartz has stated that ImaginOn intends to present a plan for regaining compliance with Nasdaq Marketplace Rules and to discuss recent activities manifesting support of the plan. Management of ImaginOn believes that recent activities, such as streamlining operations, focusing on revenue growth, and optimizing ImaginOn's core technology will increase the probability that ImaginOn can remain a Nasdaq listed company. Despite the optimism of ImaginOn’s plans and activities, there is no guarantee of an outcome favorable to ImaginOn.

If delisted, ImaginOn plans to trade on the Electronic Bulletin Board.

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-1 registration statement declared effective by the Securities and Exchange Commission on May 11, 2000. These forward-looking statements speak only as of the date hereof. The Company disclaims any intent or obligation to update these forward-looking statements.###