Communication Intelligence first-quarter total revenue decreases to $207,000

Communication Intelligence Corporation ("CIC" or "the Company") (OTC Bulletin Board: 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 first quarter ended March 31, 2010.

Also, as previously announced, the Company recently established a credit facility with Phoenix Venture Fund LLC, as the lead investor, (Phoenix) which, subject to certain conditions provides the Company with access of up to $1 million. Phoenix and its CEO, Philip Sassower have been the primary source of financial backing to CIC for over a decade.  The intent of this credit facility is to provide the ongoing financial backing required by CIC to secure a longer term financing solution and to maintain the leadership position it has established in the growing electronic signature market.

Total revenue was $207,000 for the three months ended March 31, 2010 compared to revenue of $246,000 in the corresponding prior year period.  Revenue in the first quarter ended March 31, 2010 was primarily attributable to American Family Insurance Company, Fiserv, John Deere Information Systems, Inc., Oracle Corporation, Prudential Financial Inc., St. Vincent Hospital, Travelers Indemnity Company ("Travelers"), and Wells Fargo Bank NA.

The Company believes the first quarter revenue reflects primarily the lingering effect of the unprecedented, negative impact on 2009 financial services industry IT spending brought about by the meltdown in the financial markets. IT spending was virtually non-existent in the first quarter of 2009 and although CIC orders rebounded in the second and third quarters due to the priority placed on mission critical electronic signature projects, fourth quarter 2009 IT spending fell significantly, reflecting the reduced 2009 IT budgets.  According to industry analysts such as TowerGroup, Celent and Gartner, IT financial industry spending is forecasted to recover in the last half of 2010, returning to levels of spending before the financial meltdown and higher in 2011-2012.

The operating loss for the quarter ended March 31, 2010 was $926,000 compared to an operating loss of $922,000 in the corresponding prior year period.  Cost of sales decreased approximately 18%, to $180,000 for the three months ended March 31, 2010 compared to the corresponding prior year period, primarily due to reduced direct engineering labor related to meeting customer specific requirements associated with integration of our standard products into customer systems. Operating expenses increased by less than 1%, to $953,000, compared to the prior year period, primarily attributable to sales and marketing related expenses.  The net loss applicable to common stockholders for the quarter ended March 31, 2010 was $1,665,000 compared with a net loss applicable to common stockholders of $1,303,000 in the corresponding prior year period. Net loss on a per share basis was $0.01 on 190.6 million weighted average shares outstanding for the quarter ending March 31, 2010 compared to a net loss per share of $0.01 on 130.7 million weighted average shares outstanding for the quarter ending March 31, 2009.

"The Phoenix series of investments over the last decade reflects confidence in CIC and acknowledges the progress and opportunity available to CIC and its investors in the electronic signature market," stated Guido DiGregorio CIC's Chairman & CEO.  "We have been experiencing an uptick in proposal activity consistent with forecasts by industry analysts and expect recovery of IT spending and increasing sales in the last half of the year.  Our objective has been to build unwavering customer loyalty by delivering exceptional customer value on our focused financial industry applications such as retail banking, property/casualty & life insurance and achieving the sustained revenue and income growth that will provide the increasing shareholder value we seek."