Communication Intelligence Corporation Completes a Private Placement of Preferred Stock for $11,250,000.

REDWOOD SHORES, Calif.--(BUSINESS WIRE)--Jan. 3, 1997-- Communication Intelligence Corporation (NASDAQ:CICI) (CIC) announced today that it consummated a private placement of 450,000 shares of 5% cumulative convertible preferred stock at a purchase price of $25 per share for $11,250,000.

In connection with the transaction, the Company received gross cash proceeds of $9,495,000 and accepted for exchange 390,000 shares of common stock (and rights to receive additional shares) for 70,200 shares of preferred stock from investors who purchased these common shares from the company in June 1996.

Each share of preferred stock is convertible by the holder into shares of common stock at any time beginning six months from Dec. 31, 1996 pursuant to a conversion formula that is based upon a discount from the then marketprice of the common stock. In addition, all outstanding shares of preferred stock must be converted by the holders into shares of the Company's common stock by Dec. 31, 1999, subject to the satisfaction of certain conditions and other events. Under the terms of the preferred stock, the holders are entitled to receive cumulative dividends at the rate of $1.25 per share per annum, compounded semi-annually, when payable (whether or not declared). Such dividends may be paid, at the option of the Company, in cash or additional shares of preferred stock.

Holders of the preferred stock have the right to vote with the holders of the common stock, as one class, for the election of directors and such other matters to be voted on at a meeting of the stockholders. Each share of preferred stock has one vote on such matters. In connection with the sale of the preferred stock, the Company agreed to file a registration statement with the Securities and Exchange Commission covering the shares of common stock issuable upon conversion of the preferred stock by March 31, 1997.

The Company

Communication Intelligence Corporation develops, markets, and licenses natural input computer technology -- products that use pen and image for input. Founded in 1981, CIC is a leading supplier of pen computing software products to hardware manufacturers throughout the world. The company's products include the multilingual Handwriter(R) Recognition System and SigCheck(TM) dynamic signature verification software, and the PenDOS(R) and PenMac(R) pen operating environments. CIC markets software tools such as InkTools(TM) and Sign-it(TM) which allow signature capture and verification within computer applications.

CIC also markets the Handwriter(R) for Windows(R), a peripheral input device product enabling users to have pen computing capabilities on their desktop and laptop personal computers. CIC is headquartered in Redwood Shores, Calif., and has subsidiaries in Japan and China. CIC's stock is publicly traded on NASDAQ, symbol CICI.

CONTACT: Communication Intelligence Corporation

Maurice Boucher, 415/631-7888

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