Communication Intelligence Corporation
and Subsidiaries
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from to
Commission File Number: 0-19301
COMMUNICATION INTELLIGENCE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2790442
------------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
275 Shoreline Drive, Suite 520, Redwood Shores, CA 94065-1413
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 802-7888
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
-------- --------
Number of shares outstanding of the issuer's Common Stock, as of May 14, 1997:
44,872,570.
This Quarterly Report on Form 10-Q contains 15 pages of which this is page 1.
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements Page No.
Condensed Consolidated Balance Sheets at March 31, 1997
(unaudited) and December 31, 1996..................................3
Condensed Consolidated Statements of Operations for the
three-month periods ended March 31, 1997 and 1996(unaudited).......4
Condensed Consolidated Statements of Cash Flows for the
three-month periods ended March 31, 1997 and 1996 (unaudited)......5
Notes to Condensed Consolidated Financial Statements...............7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....... .......................10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders......14
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits........................................14
(b) Reports on Form 8-K.............................14
Signatures........................................................15
Communication Intelligence Corporation
and Subsidiary
Condensed Consolidated Balance Sheets
Unaudited
(In Thousands)
<TABLE>
<CAPTION>
March 31, Dec. 31,
Assets 1997 1996
--------- ---------
Current assets:
<S> <C> <C>
Cash and cash equivalents ........................... $ 5,164 $ 10,573
Short-term investments .............................. 2,481 752
Accounts receivable, net ............................ 656 376
Inventories ......................................... 845 529
Other current assets ................................ 246 190
--------- ---------
Total current assets ............................. 9,392 12,420
Note receivable from officer ........................... 210 210
Property and equipment, net ............................ 582 537
Other assets ........................................... 468 336
--------- ---------
Total assets ..................................... $ 10,652 $ 13,503
========= =========
Liabilities and stockholders' equity Current liabilities:
Accounts payable .................................... $ 424 $ 367
Pre-petition liabilities - current .................. - 878
Accrued compensation ................................ 343 339
Other accrued liabilities ........................... 548 546
Deferred revenue .................................... 1,835 2,006
--------- ---------
Total current liabilities ........................ 3,150 4,136
Other liabilities ...................................... 20 32
Redeemable convertible preferred stock (Note 4) ........ - 9,417
Convertible preferred stock (Note 4) ................... 5 -
Common stock ........................................... 420 419
Additional paid-in capital ............................. 64,054 54,015
Accumulated deficit .................................... (56,803) (54,347)
Cumulative foreign currency translation adjustment ..... (194) (169)
Commitments (Note 3)
--------- ---------
Total liabilities, redeemable securities,
convertible preferred and common stockholders'
equity (Note 4) .................................. $ 10,652 $ 13,503
========= =========
</TABLE>
<PAGE>
Communication Intelligence Corporation
and Subsidiary
Condensed Consolidated Statements of Operations
Unaudited
(In Thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1997 1996
--------- ---------
Revenues:
<S> <C> <C>
Product ...................................... $ 765 417
License and royalty .......................... 272 131
Development contracts ........................ 161 91
-------- --------
1,198 639
Operating costs and expenses:
Cost of sales
Product .................................. 635 329
License, royalty and other costs ......... 169 103
Development contracts .................... 97 91
Research and development ..................... 476 357
Sales and marketing .......................... 1,400 714
General and administrative ................... 429 494
-------- --------
Total operating costs and expenses ....... 3,206 2,088
-------- --------
Loss from operations .............................. (2,008) (1,449)
Interest and other income (expense) net,(Note 4) .. (421) 80
Interest expense .................................. (17) (79)
-------- --------
Net loss ................................. $ (2,446) $ (1,448)
======== ========
Net loss per common share ................ $ (0.05) $ (0.04)
======== ========
Weighted average common shares outstanding 44,521 40,140
======== ========
</TABLE>
<PAGE>
Communication Intelligence Corporation
and Subsidiary
Condensed Consolidated Statements of Cash Flows
Unaudited
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
--------- ----------
1997 1996
--------- ----------
Cash flows from operating activities:
<S> <C> <C>
Net loss ................................................ $ (2,446) $ (1,448)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization ...................... 47 74
Warrant issuance ................................... 484 -
Stock options issued for services .................. 46 -
Net (increase) decrease in operating assets and liabilities:
Accounts receivable ............................. (280) 189
Inventories ..................................... (337) (74)
Prepaid expenses and other current assets ....... (57) 67
Accounts payable and accrued compensation ....... 61 (249)
Deferred revenues ............................... (172) (96)
Pre-petition liabilities ........................ (878) (762)
Other accrued liabilities ....................... (6) (169)
-------- --------
Net cash used in operating activities ........ (3,538) (2,468)
-------- --------
Cash flows from investing activities:
Proceeds from sale of short-term investments ..... 3,000 2,062
Purchase of short-term investments ............... (4,729) (3,029)
Acquisition of property and equipment ............ (79) (70)
Increase in other assets ......................... (127) (54)
-------- --------
Net cash used in investing activities ........ (1,935) (1,091)
-------- --------
Cash flows from financing activities:
Principal payments on short-term debt ............ - (30)
Principal payments on capital lease obligations .. (4) (9)
Proceeds from issuance of common stock ........... 102 120
-------- --------
Net cash provided by financing activities .... 98 81
-------- --------
Effect of exchange rate changes on cash ............... (34) (46)
-------- --------
Net decrease in cash and cash equivalents ............. (5,409) (3,524)
Cash and cash equivalents at beginning of quarter ..... 10,573 5,924
======== ========
Cash and cash equivalents at end of quarter ........... $ 5,164 $ 2,400
======== ========
</TABLE>
<PAGE>
Communication Intelligence Corporation
and Subsidiary
Condensed Consolidated Statements of Cash Flows
Unaudited
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1997 1996
--------- ---------
Schedule of non-cash transactions:
<S> <C> <C>
Reclassification of current note receivable from
officer to non-current $ - $ 210
========= =========
</TABLE>
Communication Intelligence Corporation
and Subsidiaries
FORM 10-Q
1. Interim financial statements The accompanying unaudited condensed
consolidated financial statements of Communication Intelligence
Corporation (the "Company" or "CIC") have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission .
Accordingly, they do not include all of the information and footnotes
required by GAAP for complete financial statements. In the opinion of
management, the financial statements included in this report reflect
all adjustments (consisting only of normal recurring adjustments)
which Communication Intelligence Corporation considers necessary for a
fair presentation of its financial position at the dates and the
Company's results of operations and cash flows for the periods
presented. The interim results are not necessarily indicative of the
results to be expected for the entire year. The corporate mission of
Communication Intelligence Corporation is to develop and market
natural human, pen input, computer interfaces and handwriting
recognition-based security technologies and products to satisfy the
emerging markets for pen-based computing and electronic commerce.
These emerging markets for CIC's products include all areas of
personal computing as well as electronic commerce and communications.
The Company's research and development activities have given rise to
numerous technologies and products including: two pen-based operating
environments (PenDOS(R)and PenMAC(R)), its multi-lingual Handwriter(R)
Recognition System, and three desktop computing products,
Handwriter(R) for Windows(R)and MacHandwriter(R)and its recently
released Handwriter Manta. Additionally, CIC has developed products
for dynamic signature verification, electronic ink data compression
and encryption and a suite of development tools and applications which
the Company believes could increase the functionality of its core
products and could facilitate their integration into original
equipment manufacturers' ("OEM") hardware products and computer
systems and networks. This financial information should be read in
conjunction with the Company's audited financial statements included
in its Annual Report on Form 10-K for the year ended December 31,
1996. Certain prior period amounts in the financial statements have
been reclassified to conform with the current period presentation. 2.
Cash and cash equivalents The Company considers all highly liquid
investments with original maturities of up to 90 days to be cash
equivalents. Short-term investments are classified as
"available-for-sale" and are stated at fair value. Any unrealized
gains or losses are reported as a separate component of stockholders'
equity, but, to date, have not been significant. The cost of
securities sold is based on the specific identification method.
<PAGE>
2. Cash and cash equivalents (continued) Cash and cash equivalents
included certain highly liquid investments with original maturities of
up to 90 days as follows:
<TABLE>
<CAPTION>
March 31, Dec. 31,
1997 1996
---------- ---------
(In thousands)
<S> <C> <C>
Cash in bank $ 493 $ 9,483
Commercial paper 4,667 1,088
Money markets 4 2
======== ========
$ 5,164 $10,573
======== ========
</TABLE>
Short-term investments consisted of the following available-for-sale
securities as follows:
<TABLE>
<CAPTION>
March 31, Dec.31,
1997 1996
---------- --------
(In thousands)
<S> <C> <C>
U.S. Corporate securities $ 1,981 $ 252
Other debt securities 500 500
--------- ---------
$ 2,481 $ 752
========= =========
</TABLE>
Corporate debt securities at March 31, 1997 mature in less than one year.
Other debt securities at March 31,1997 consist of securities not due at a
single maturity date.
3. Inventories Inventories are stated at the lower of cost (first-in,
first-out) or market. At March 31, 1997, inventory was comprised
primarily of finished goods. 4. Convertible Preferred Stock On
December 31, 1996, the Company completed a private placement of
450,000 shares of redeemable convertible preferred stock (the
"December Private Placement") at $25.00 per share to certain
institutional and other investors. Of the aggregate 450,000 shares
sold, 70,200 shares of redeemable convertible preferred stock were
issued in exchange for 390,000 shares of common stock, originally
issued in the June Private Placement. The Company agreed to register
the redeemable convertible preferred stock by filing a Registration
Statement on Form S-3 by March 31, 1997 and by using its best efforts
to cause such Registration Statement to be declared effective within
180 days from December 31, 1996 (the "Declaration Date"). In the event
that the Registration Statement is not declared effective within 180
days from December 31, 1996, the Company is required to pay to each
holder a default payment (the "Default Payment") in the amount equal
to 3% of the liquidation preference for the redeemable convertible
preferred stock held for any part of each 30-day period subsequent to
the Declaration Date that the Registration Statement has not been
declared effective. A similar Default Payment must be made by the
Company to the holders of redeemable convertible preferred stock in
the event that (i) the Company fails, refuses or is
<PAGE>
4. Convertible Preferred Stock (continued) unable to cause the securities
covered by the Registration Statement to be listed on the exchange on
which the Company's common stock is traded, (ii) any holder's ability
to sell the securities covered by the Registration Statement is
suspended for more than 60 days, or at any time during the twelfth or
thirteenth fiscal month following December 31, 1996, or (iii) the
Company does not have a sufficient number of shares of common stock
available to effect conversion of the redeemable convertible preferred
stock. On March 28, 1997, and effective as of December 31, 1996,
holders constituting 100% of the issued and outstanding redeemable
convertible preferred stock executed a waiver to certain provisions of
the Registration Rights Agreement (the "Agreement"), entered into in
connection with the December Private Placement, which irrevocably
waived such holders' rights to any redemption in exchange for the
issuance to the holders of 300,000 warrants to purchase the Company's
common stock, allocated amongst the holders on a pro-rata basis. The
warrants expire five years from the date of issuance and have an
exercise price of $2.00 per share, subject to adjustment for
antidilution. The Company has ascribed a value of $484,000 to these
warrants, which was recorded as an expense in the Company's statement
of operations for the quarter ended March 31, 1997. The fair value
ascribed to the warrants was estimated on the date of issuance using
the Black-Scholes pricing model with the following assumptions:
risk-free interest rate of 6.60%; expected life of 5 years; expected
volatility of 104%; and expected dividend yield of 0%. As a result of
the waiver, the shares of redeemable convertible preferred stock have
been reclassified as convertible preferred stock for the quarter ended
March 31, 1997 and, as such, are included in stockholders' equity for
such period. 5. Recent Accounting Pronouncement In February 1997, the
Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings per Share". This statement is
effective for the Company's quarter ending December 31, 1997. The
Statement redefines earnings per share under generally accepted
accounting principles. Under the new standard, primary earnings per
share is replaced is replaced by basic earnings per share and fully
diluted earnings per share is replaced with diluted earnings per
share. If the Company had adopted this statement for the quarter ended
March 31, 1997 and for the comparable period in the prior year, the
Company's (loss) per share would have been as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996
-------- --------
(in thousands)
<S> <C> <C>
Basic loss per share . $ (0.05) $ (0.04)
Diluted loss per share $ (0.05) $ (0.04)
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations Results of Operations Revenues.
The Company's revenues are derived from product sales, license and royalty
revenues and development contracts. For the three months ended March 31, 1997,
revenues increased by 87% to $1,198,000 from $639,000 for the comparable three
months period ended March 31, 1996 as discussed below:
<TABLE>
<CAPTION>
Three months ended
March 31,
------------------------------
---------- ---------
1997 996
--------- ---------
Unaudited
(in thousands)
Revenues:
<S> <C> <C>
Product .............................. $ 765 $ 417
License and royalty................... 272 131
Development contract.................. 161 91
====== ======
$1,198 $ 639
====== ======
</TABLE>
Product sales increased to $765,000 for the three month period ended March
31, 1997 from $417,000 in the comparable prior year period. This increase was
due primarily to the introduction of Handwriter products into the retail channel
through CompUSA and an increase in Handwriter sales to the Corporate market.
Handwriter product sales increased $350,000 to $488,000 during the period ended
March 31, 1997 compared to $138,000 in the prior year period. Product sales by
the Company's 79% owned joint venture in The Peoples Republic of China (the
"Joint Venture") were $275,000 for the period ended March 31, 1997compared to
$277,000 during the same period last year.
Revenues from license and royalty fees for the three month period ended March
31, 1997 increased to $272,000 from $131,000 in the comparable prior period.
This increase was primarily the result of higher shipment volumes by the
Company's licensees and to approximately $164,000 in royalty revenues recognized
on licensing agreements for which the Company has no further obligation to
deliver additional software or services.
Development contract revenues for the three month period ended March 31, 1997
increased 77% to $161,000 from $91,000 in the comparable prior year period. This
increase was offset in part by a $10,000 or 11% decrease in grant revenues
received from The National Science Foundation ("NSF"), for basic research,
compared to the first quarter 1996 development contract revenues attributable to
a grant from the US Government's National Institute of Standards and Technology
("NIST") of $91,000. The NIST grant was awarded in December 1993 to supplement
the Company's development of a recognition system for the Chinese language The
NIST grant expired in April 1996.
Cost of Sales. Cost of sales is comprised of costs from product sales,
licensing, royalty and other costs and development contracts. Cost of product
sales for the three months ended March 31, 1997 consists primarily of cost of
materials, approximately $235,000 of which is related to the hardware and
software components involved in the system integration activities of the Joint
Venture, compared to approximately $233,000 in the prior year period, and the
remainder of which related to costs of Handwriter product sales. HandwriterAE
product cost of materials was approximately $400,000 for the three months ended
March 31, 1997 compared to approximately $95,000 in the prior year period. The
decrease in the Handwriter products gross margin to 17% during the three months
ended March 31, 1997 from 31% in the comparable period of the prior year
resulted from the introduction of the Handwriter products into the retail
channel. Gross margin on product sales activities of the Joint Venture was 15%
during the three months ended March 31, 1997 compared to 16% in the prior year.
License, royalties and other costs, which include procurement, warehousing, and
related personnel in connection with sales of the Company's products, increased
by approximately $87,000 to $169,000 for the three months ended March 31, 1997
compared $82,000 for the comparable 1996 period. This increase in other costs
related primarily to additional personnel costs of $42,000 and product
fulfillment and other costs of $43,000 in connection with the launch of the
Company's HandwriterAE for WindowsAE product in the retail market in the first
quarter of 1997. There were no comparable activities in the prior year period.
The increase in other costs was offset by a reduction in the amortization of
capitalized software development costs of $21,000 for the three months ended
March 31, 1997 as compared to the prior year. Costs incurred in connection with
development contract revenue are expensed as incurred and increased 6% during
the three months ended March 31, 1997 as compared to the March 31, 1996 period,
commensurate with the increase in contract development revenues in the first
quarter of 1997.
Research and development. Research and development expenses for the three month
period ended March 31, 1997 increased by 33% to $476,000 as compared to $357,000
in the comparable period of the prior year. This increase was primarily
attributable to approximately $63,000 in payroll and related costs attributable
to increases in headcount and $37,000 in consulting services compared to the
prior year. Other costs, including facility and related costs, increased
approximately $19,000 for the three month period ended March 31, 1997 as
compared to the prior year. This increase was commensurate with the increase in
personnel. The Company did not capitalize any software development costs in the
three month period ended March 31, 1997 or 1996, respectfully.
Sales and marketing. Sales and marketing expenses for the three month period
ended March 31, 1997 increased 96% to $1,400,000 as compared to $714,000 in the
comparable period of the prior year. This increase was primarily due to
increases of $374,000 in advertising and related expenses, and $233,000 in
payroll and related expenses. Other costs including facilities and related
expenses increased $49,000 commensurate with additions in staffing. The
increases in staffing and advertising expenses were primarily due to . the
introduction and support of the Company's Handwriter products into the retail
channel during the first quarter of 1997, and continued marketing and sales
efforts in the corporate channel.
General and administrative. General and administrative expenses for the three
month period ended March 31, 1997 decreased 13% to $429,000 as compared to
$494,000 in the comparable period of the prior year. This decrease was primarily
attributable to reductions of approximately $42,000 in payroll and related costs
and $21,000 in other costs including insurance and facilities and related costs
associated with the transfers of general and administrative staff to sales and
marketing activities.
Interest and other income (expense). Interest and other income (expense)
increased due to a one time charge to expense of $484,000 for 300,000 warrants
issued on March 28, 1997, and effective as of December 31, 1996, to holders
constituting 100% of the issued and outstanding redeemable convertible preferred
stock in exchange for the execution of a waiver to certain provisions of the
Registration Rights Agreement (the "Agreement"), entered into in connection with
the December Private Placement (Note 4).
Liquidity and Capital Resources
At March 31, 1997, cash, cash equivalents and short term investments totaled
$7,645,000 compared to cash, cash equivalents and short term investments of
$11,325,000 at December 31, 1996. This decrease was primarily the result of
$3,538,000 used in operating activities including the final payment of $878,000
to pre-petition creditors during the quarter. Total current assets were
$9,392,000 at March 31, 1997 compared to $12,420,000 at December 31, 1996.
As of March 31, 1997, the Company's principal source of liquidity was its cash,
cash equivalents and short-term investments of $7,645,000. The Company believes
that the above-mentioned funds, are adequate to meet projected working capital
and other cash requirements for the next twelve months. However the Company may
be required to obtain additional financing earlier.
Current liabilities, which include deferred revenue, were $3,150,000 at March
31, 1997. Deferred revenue, totaling $1,835,000 at March 31, 1997, primarily
reflects nonrefundable advance royalty fees received from the Company's
licensees which are generally recognized as revenue by the Company in the period
in which licensees report that products incorporating the Company's software
have been shipped. As such, the period over which such deferred revenue will be
recognized as revenue is uncertain because the Company cannot presently
determine either the timing or volume of future shipments by its licensees.
In 1993, the Company formed the Joint Venture with The Ministry of Electronic
Industries of Jiangsu Province (the "Government") of The People's Republic of
China. The Joint Venture, Communication Intelligence Computer Corporation, Ltd.
("CICC"), is 79% owned by the Company. Under the provisions of the joint venture
agreement, in exchange for 79% ownership, the Company is to contribute up to
$5.4 million in cash, and the Company will provide non-exclusive licenses to
technology and certain distribution rights. The Government will contribute
certain land use rights and provide other services for the joint venture. As of
March 31, 1996, the Company had contributed $900,000 in cash and had provided
non-exclusive licenses to technology and certain distribution rights, while the
Government had contributed certain land use rights.
The Company is planning the next contribution of $900,000 in cash and
approximately $1,700,000 in licensed technology rights during the second quarter
of 1997. This contribution will help fund CICC's new Software Development
Division. This division was formed to create pencentric applications initially
for the Chinese market. CICC also plans to introduce the Chinese Handwriter
during the second quarter of 1997. There can be no assurance that the Company
will be able to fund the balance of any required cash contributions to the Joint
Venture, that the Joint Venture will be successful in developing or selling
integrated computer systems or other Company products to the Chinese market or
that the Company will realize any significant benefits from its contributions to
the Joint Venture.
In April 1997, the Company's 1997 Registration Statement on Form S-3 for the
offering by selling security holders of shares of common stock issuable upon
conversion of or otherwise in respect to 450,000 shares of the Company's
Convertible Preferred and the exercise of warrants to purchase and aggregate of
637,000 shares of common stock was declared effective by the Securities and
Exchange Commission. The Convertible Preferred may be converted by the holder
into shares of common stock at any time beginning July 1, 1997 or earlier if a
change in control transaction occurs.
On March 28, 1997, and effective as of December 31, 1996, holders constituting
100% of the issued and outstanding redeemable convertible preferred stock
executed a waiver to certain provisions of the Registration Rights Agreement
(the "Agreement"), entered into in connection with the December Private
Placement, which irrevocably waived such holders' rights to any redemption in
exchange for the issuance to the holders of 300,000 warrants to purchase the
Company's common stock, allocated amongst the holders on a pro-rata basis. The
warrants expire five years from the date of issuance and have an exercise price
of $2.00 per share, subject to adjustment for antidilution. The Company has
ascribed a value of $484,000 to these warrants, which was recorded as an expense
in the Company's statement of operations for the quarter ended March 31, 1997.
The fair value ascribed to the warrants was estimated on the date of issuance
using the Black-Scholes pricing model with the following assumptions: risk-free
interest rate of 6.60%; expected life of 5 years; expected volatility of 104%;
and expected dividend yield of 0%. As a result of the waiver, the shares of
redeemable convertible preferred stock have been reclassified as convertible
preferred stock for the quarter ended March 31, 1997 and, as such, are included
in stockholders' equity for such period.
Future Results and Stock Price
The Company's future earnings and stock price may be subject to significant
volatility. The public stock markets have exhibited extreme volatility in stock
prices in recent years. The stock prices of high technology companies have
experienced particularly high volatility, including at times severe price
changes that are unrelated or disproportional to the operating performance of
these specific companies. The trading price of the Company's Common Stock could
be subject to wide fluctuation in response to, among other factors,
quarter-to-quarter variations in operating results, announcements of
technological innovations or new products by the Company or its competitors,
announcements of new strategic relationships by the Company or its competitors,
general conditions in the computer industry or the global economy generally, or
market volatility unrelated to the Company's business and operating results.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27, Financial Data Schedule..
(b) Reports on Form 8-K
On January 22, 1997, the Company filed a Form 8-K (dated January
22,1997) under Item 5, Other Events, reporting nation wide offering of
CIC Handwriter products by CompUSA.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMUNICATION INTELLIGENCE CORPORATION
-------------------------------------------------------------
Registrant
May 14, 1997 /s/ Francis V. Dane
- ---------------------- ---------------------------------------------
Date Francis V. Dane
Vice President, Secretary and Treasurer
(Principal Financial Officer and Officer Duly
thorized to Sign on Behalf of the Registrant)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> Communication Intelligence Corporation
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
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