Redwood Shores, CA, August 14, 2009 - Communication Intelligence Corporation (“CIC”) (OTC BB: CICI), a leading supplier of electronic signature solutions for business process automation in the financial industry* and the recognized leader** in biometric signature verification, announced today its financial results for the three and six-month periods ended June 30, 2009.

Total revenues for the three months ended June 30, 2009 were $404,000 compared to revenues of $407,000 in the corresponding prior year period. Orders for the three month period ended June 30, 2009, however, were $930,000, $526,000 higher than revenue recognizable for that period and 75% of such orders are expected to be recognized as revenue in the last half of the year. Revenues were primarily attributable to American Family Insurance, American General Life & Accident, Charles Schwab, Misys Healthcare, Prudential Insurance, Snap-On Credit and Wells Fargo Bank.

The operating loss for the three months ended June 30, 2009 was $660,000 compared to an operating loss of $743,000 in the prior year period. The decrease in operating loss is due primarily to a decrease in operating expenses. The operating loss reflects the loss before interest expense, amortization of the loan discount and deferred financing cost and the loss on derivative liability.

The Company’s net loss applicable to common stockholders for the three month period ended June 30, 2009 was $2,876,000 compared to a net loss of $1,464,000 for the corresponding prior year period. Non-operating expense for the three months ended June 30, 2009 was $2,216,000, an increase of $1,495,000, compared to $721,000 for the corresponding prior year period. This increase is primarily attributable to a $829,000 charge to expense of the remaining unamortized non-cash loan amortization and deferred financing cost associated with the cancellation of the June 2008 notes and warrants, in exchange for the new debt and associated warrants issued in May 2009, and a $966,000 loss related to the derivative liability due to an increase in the market price of the Company’s common shares from the date of the May financing (announced in a May 29, 2009 press release) to June 30, 2009. The basic and diluted loss per share was $0.02 on approximately 131 million weighted average common shares outstanding for the three months ending June 30, 2009 and $0.01 on approximately 129 million shares outstanding for the comparable prior year period.

Total revenues for the six months ended June 30, 2009 were $650,000 compared to revenues of $837,000 in the corresponding prior year period. The operating loss for the six months ended June 30, 2009, before interest expense, amortization of the loan discount and deferred financing cost and the loss on derivative liability was $1,582,000, compared to an operating loss of $1,393,000 in the prior year comparable period. The increase in operating loss is due to the decrease in revenues over the six month period.

The Company’s net loss applicable to common stockholders for the six months ended June 30, 2009 and 2008 was $4,162,000 and $2,314,000, respectively. The increase in the net loss is due primarily to the factors stated above for the three month period ended June 30, 2009. The basic and diluted loss per share was $0.03 on approximately 131 million weighted average common shares outstanding for the six months ending June 30, 2009 and $0.02 on approximately 129 million shares outstanding for the comparable prior year period.

“With the significant uptick in second quarter orders we expect the momentum we experienced in the last half of last year will resume and continue into the last half of this year. Despite the first quarter financial services IT spending freeze we experienced, and the resultant heavy hit on our first quarter revenue, we believe that cash is freeing up for orders that fund mission critical projects,” stated CIC’s Chairman & CEO, Guido DiGregorio. “Last month we were pleased to announce, that American Family Insurance, a Fortune 500 firm, chose CIC to fulfill its automation needs. We believe this win evidences the product differentiation of our Signature One Ceremony Server and also the successful track record that our Ceremony Server deployments have established including the two prior successive wins with Travelers and Allstate deployed in the third and forth quarters last year. We have not received any significant input from customers or prospects suggesting that the adverse conditions have resulted in cancellation of the mission critical projects for this year. Rather, they have been delayed. There is increasing awareness in the financial industry that our technology is the answer to the heightened challenges they are facing and recognition of the need and desire to purchase sooner rather than later in order to gain the benefits of deployment this year. So, we believe the purchase priority necessary to generate sufficient orders to achieve last half profitability exists. However, realization of that possibility depends on the speed and magnitude of the spending recovery. We do anticipate that 2009 revenue will exceed 2008.”

Selected financial information follows. Detailed corporate and financial information is available on CIC’s website at www.cic.com.

About CIC
Communication Intelligence Corporation (“CIC”) is a leading supplier of electronic signature solutions for business process automation in the Financial Industry and the recognized leader in biometric signature verification. CIC’s products enable companies to achieve truly paperless work flow in their eBusiness processes by enabling them with “The Power to Sign Online®” with multiple signature technologies across virtually all applications in SaaS and fully deployed delivery models.

Industry leaders such as AGLA, Allstate, Bank of America, Charles Schwab, Prudential, Snap-on Credit, Travelers, Wells Fargo and WFG (World Financial Group) chose CIC’s products to meet their needs. CIC has deployments with over 400 channel partners and enterprises worldwide representing hundreds of thousands of users, with over 500 million electronic signatures captured, eliminating the need for over a billion pieces of paper. CIC sells directly to enterprises and through system integrators, channel partners and OEMs. CIC is headquartered in Redwood Shores, California and has a joint venture, CICC, in Nanjing, China. For more information, please visit our website at http://www.cic.com

*In December 2008, CIC was named to Forrester Research’s “Hot Banking Tech Companies To Watch in 2009” Report.

**In October 2007, CIC was awarded the 2007 Global Frost & Sullivan Award for Market Leadership in the dynamic signature verification market.

Forward Looking Statement
Certain statements contained in this press release, including without limitation, statements containing the words “believes”, “anticipates”, “hopes”, “intends”, “expects”, and other words of similar import, constitute “forward looking” statements within the meaning of the Private Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual events to differ materially from expectations. Such factors include the following (1) technological, engineering, quality control or other circumstances which could delay the sale or shipment of products; (2) economic, business, market and competitive conditions in the software industry and technological innovations which could affect the Company’s business; (3) the Company’s inability to protect its trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others or prevent others from infringing on the proprietary rights of the Company; and (4) general economic and business conditions. These forward-looking statements speak only as of the date hereof and the Company disclaims any intent or obligation to update these forward-looking statements.

CIC and The Power to Sign on Line are registered trademarks of Communications Intelligence Corporation. All other trademarks and registered trademarks are the property of their respective holders.

COMMUNICATION INTELLIGENCE CORPORATION
Selected Consolidated Statement of Operations Information
(Dollars in thousands, except per share amounts)
 

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