Communication Intelligence Corporation Appoints Guido DiGregorio as Chief Executive Officer.

REDWOOD SHORES, Calif.--(BUSINESS WIRE)--June 8, 1999--

Communication Intelligence Corporation (CIC) (Nasdaq:CICI) announced today that Mr. Guido DiGregorio, has been named as the Company's Chief Executive Officer.

Mr. DiGregorio, who serves on the Company's Board of Directors and as a member of the Executive Committee of that Board, first joined the Company in November of 1997 as its President and Chief Operating Officer.

The Company was founded in 1981 and had suffered significant losses each year of its existence. Since Mr. DiGregorio joined CIC as President and Chief Operating Officer the Company has, quarter by quarter, made consistent progress toward its stated goals of becoming profitable and self-funding from operations.

Under Mr. DiGregorio's leadership, the Company implemented a domestic business strategy involving a three-pronged thrust: (1) accelerate the growth of license revenue through original equipment manufacturers (OEM's), to primarily pen computer, handheld organizer and Smartphone manufacturers (2) accelerate the sale of aftermarket consumer software offerings over the internet via the Company's website and selected on-line resellers; and (3) establish sustainable sales growth with enterprises by leveraging CIC technologies which enable server-side pen solutions through a distributed network architecture.

During 1998, his first year at the helm, Mr. DiGregorio led the Company's transition from a combined hardware and software company to a company focused primarily on software. This change in strategy enabled the Company to eliminate expenses related to hardware products and direct retail sales reducing overall 1998 operating expenses by approximately $6 million, 50% of 1997 levels. In 1998, the Company's OEM revenues from actual product shipments (new sales versus the recognition of past years' deferred revenue) almost doubled as compared to 1997. Consumer sales of the Company's software sold over the Internet, via CIC's website, increased approximately 900% in 1998 versus 1997. The Company's Joint Venture in China, CICC, increased revenues more than 25% in 1998 over 1997 amounts. In addition to the reductions in operating expenses sited above, these positive trends in revenue were accompanied by an approximate reduction in Cost of Sales of $3.9 million as compared to 1997.

The first quarter of 1999 marked a milestone in the Company's existence. For the first time in its history the Company ended a quarter with a positive cash flow from purely operational sources. The Company's revenue outlook also continued to look brighter during that quarter. Without giving effect to discontinued hardware sales through the retail channel and recognition of past year's deferred revenues, CIC's first quarter revenues increased more than 44% over the first quarter of the prior year. OEM revenues from actual product shipments (new sales versus the recognition of past years' deferred revenue) increased more than 75% for the three months ended March 31, 1999 over the same three-month period of 1998. Consumer sales of the Company's software sold over the internet, via CIC's website, for the first quarter of 1999 surpassed total 1998 internet sales by 22%.

"I would like to thank our shareholders for their continued support through this transitional stage. I am pleased to report that our new strategies supported by our new management team and organizational structure are paying off. We are approaching the new millennium with virtually a new company. We are focused on software; we are positioned, with companies such as Ericsson, to benefit from the revolutionary developments in telecommunications and revenues from our Web presence continue to grow. I look forward to leading the Company to profitability and to continued increases in shareholders' value," said Mr. DiGregorio.

About CIC

Communication Intelligence Corporation (CIC) is a leading supplier of pen-based software solutions. The Company's core software technologies include multilingual handwriting recognition systems, dynamic signature verification, ink compression, and operating system extensions that enable pen input. CIC's products are designed to increase the ease of use, functionality, and security of mobile electronic devices ranging from handheld companions to cellular phones. The Company's Jot(R) handwriting recognition system is currently licensed by Microsoft and ships with every Palm-size PC as the standard recognizer. Key licensees of the Company's technologies include Ericsson, Fujitsu, Hitachi, Microsoft, Mitsubishi and Nortel. CIC is headquartered in Redwood Shores, California and has a joint venture, CICC, in Nanjing, China. For more information about CIC and its products please visit our website at http://www.cic.com.

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 the Company's 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 and the availability of sufficient financing.