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, 2003


                                       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 500, Redwood Shores, CA 94065-1413
         -------------------------------------------------------------
         (Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code:    (650) 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 13, 2003: 96,788,023.


<PAGE>
                                      INDEX



PART I.  FINANCIAL INFORMATION


   Item 1.  Financial Statements                                        Page No.
            --------------------                                        --------

   Condensed Consolidated Balance Sheets at March 31, 2003
      (unaudited) and December 31, 2002......................................3

   Condensed Consolidated Statements of Operations
      for the Three-MonthPeriod Ended March 31, 2003
      and 2002 (unaudited)...................................................4

   Condensed Consolidated Statements of Changes in
      Stockholders' Equity for the Three-Month
      Period Ended March 31, 2003 (unaudited)................................5

   Condensed Consolidated Statements of Cash Flows for the
     Three-Month Period Ended March 31, 2003 and 2002 (unaudited)............6

   Notes to Unaudited Condensed Consolidated Financial Statements............7


   Item 2.  Management's Discussion and Analysis of Financial Condition and
            ----------------------------------------------------------------
      Results of Operations.................................................11
     ---------------------

   Item 3.  Quantitative and Qualitative Disclosures About Market Risk......18
            ----------------------------------------------------------

   Item 4.  Controls and procedures.........................................18
            -----------------------

PART II.  OTHER INFORMATION

   Item 1.  Legal Proceedings...............................................18
            -----------------

   Item 2.  Change in Securities............................................19
            --------------------

   Item 3.  Defaults Upon Senior Securities.................................19
            -------------------------------

   Item 4.  Submission of Matters to a Vote of Security Holders.............19
            ---------------------------------------------------

   Item 5.  Other Information...............................................19
            -----------------

   Item 6.  Exhibits and Reports on Form 8-K
            --------------------------------


           (a)Exhibits......................................................19

           (b) Reports on Form 8-K..........................................19

           Signatures.......................................................20

          Certifications....................................................21


                                      -2-
<PAGE>

                     Communication Intelligence Corporation
                                 and Subsidiary
                      Condensed Consolidated Balance Sheets
                                 (In thousands)

                                                  March 31,         December 31,
                                                    2003                2002
                                                  ---------         -----------
                                                  Unaudited
Assets
Current assets:
Cash and cash equivalents.........................$   936            $   711
     Accounts receivable, net.....................    891                477
     Inventories..................................     94                113
     Prepaid expenses and other current assets....    197                244
                                                  ---------         ----------
         Total current assets.....................  2,118              1,545

Property and equipment, net.......................    132                159
Capitalized software costs........................      9                 12
Patents and trademarks............................  5,326              5,421
Other assets......................................     30                 31
                                                  ---------         ----------

         Total assets.............................$ 7,615            $ 7,168
                                                  =========         ==========

Liabilities and Stockholders' equity
Current liabilities:
     Short-term debt............................. $   600            $     -
     Accounts payable............................     345                160
Accrued compensation.............................     223                250
     Other accrued liabilities...................     474                489
     Deferred revenue............................      67                165
     Capital Lease Obligations...................      35                 38
                                                  ---------         -----------
         Total current liabilities...............   1,744              1,102

Notes payable - Related party....................   3,000              3,000

Minority interest................................     132                132

Commitments

Stockholders' equity:
     Common stock................................     935                915
     Additional paid-in capital..................  82,118             82,025
     Accumulated deficit......................... (80,129)           (79,819)
     Cumulative translation adjustment...........    (185)              (187)
                                                 ----------         -----------
         Total stockholders' equity..............   2,739              2,934
                                                 ----------         -----------

    Total liabilities and stockholders' equity... $ 7,615            $ 7,168
                                                 ==========        ============

   The accompanying notes form an integral part of these Financial Statements

                                      -3-
<PAGE>

                     Communication Intelligence Corporation
                                 and Subsidiary
                 Condensed Consolidated Statements of Operations
                                    Unaudited
                    (In thousands, except per share amounts)

                                                      Three Months Ended
                                                           March 31,
                                                 -----------       ------------
                                                    2003                2002
                                                 -----------       ------------

Revenues:
     Online.....................................  $     114          $     124
     Corporate..................................        667                698
     China......................................        327                335
                                                 -----------        -----------

         Total revenues.........................      1,108              1,157

Operating costs and expenses:
     Cost of sales:
         Online.................................          1                163
         Corporate .............................         12                 57
         China..................................        220                221
     Research and development...................        340                412
     Sales and marketing........................        283                387
     General and administrative.................        512                540
                                                 -----------        -----------

         Total operating costs and expenses.....      1,368              1,780
                                                 -----------        -----------

Loss from operations............................       (260)              (623)

Interest and other income (expense), net........         (1)               (13)

Interest expense................................        (49)               (52)

                                                ------------       ------------

         Net loss .............................. $     (310)         $    (688)
                                                ============       ============

Basic and diluted loss per share................ $    (0.01)         $   (0.01)
                                                ============       ============

Weighted average common shares outstanding......     91,907             90,946
                                                ============       ============


                                      -4-
<PAGE>

                     Communication Intelligence Corporation
                                 and Subsidiary
           Consolidated Statements of Changes in Stockholders' Equity
                                    Unaudited
                    (In thousands, except per share amounts)

                                                             Accumulated
                                        Additional              Other
                      Shares    Common   Paid-In    Accum.  Comprehensive
                   Outstanding  Stock    Capital    Deficit     Loss       Total

Balances as
of December
  31, 2002.........  91,481   $  915   $ 82,025  $(79,819)   $  (187)   $ 2,934
                    ------------------------------------------------------------

Sale of shares
of Common
Stock net of
issuance
costs..............   2,041      20          93                             113

Foreign currency
translation
adjustment...                                                      2          2

Net loss...........                                   (310)                (310)
                   -------------------------------------------------------------

Balances as of
 March 31,2003..... 93,522   $  935    $ 82,118   $(80,129)   $ (185)   $ 2,739
                   =============================================================


                                      -5-
<PAGE>

                     Communication Intelligence Corporation
                                 and Subsidiary
                 Condensed Consolidated Statements of Cash Flows
                                    Unaudited
                                 (In thousands)

                                                           Three Months Ended
                                                                March 31,
                                                       -----------    ----------
                                                           2003          2002
                                                       -----------    ----------

Cash flows from operating activities:
  Net loss............................................ $    (310)     $   (688)
  Adjustments to reconcile net loss to net cash
  (used) in operating activities:
     Depreciation.....................................        30            19
     Patent amortization..............................        95            98
     Disposal of fixed assets.........................         -             5
     Changes in operating assets and liabilities:
       Accounts receivable, net.......................      (414)          (74)
         Inventories..................................        19           (40)
         Prepaid expenses and other current assets....        47           (67)
         Other assets.................................         1           137
         Accounts payable.............................       185           135
         Accrued compensation.........................       (27)           30
         Other accrued liabilities....................       (13)          (17)
         Deferred revenue.............................       (98)           43
                                                      ------------    ----------

         Net cash (used in) operating  activities.....      (485)         (419)
                                                      ------------    ----------

Cash flows from investing activity:
     Acquisition of property and equipment............         -           (11)
                                                      ------------    ----------

         Net cash used in investing activity..........         -           (11)
                                                      ------------    ----------

Cash flows from financing activities:
     Payments on long-term debt.......................         -          (121)
     Proceeds from acquisition of short term debt.....       600             -
     Proceeds from the issuance of common stock.......       400             -
     Offering costs...................................      (287)            -
     Proceeds from exercise of stock options
     and warrants.....................................         -           110
     Principal payments on capital lease obligations..        (3)           (2)
                                                      ------------    ----------

         Net cash provided by financing activities....       710           (13)
                                                      ------------    ----------

Effect of exchange rate changes on cash...............         -             -
                                                      ------------    ----------

Net increase (decrease) in cash and cash equivalents..       225          (443)
Cash and cash equivalents at beginning of period......       711         2,588
                                                      ------------    ----------

Cash and cash equivalents at end of period............$      936      $  2,145
                                                      ============    ==========

                                      -6-
<PAGE>

                     Communication Intelligence Corporation
                                 and Subsidiary
         Notes to Unaudited Condensed Consolidated Financial Statements
                    (In thousands, except per share amounts)
                                    FORM 10-Q


1.     Interim financial statements

The financial  information  contained  herein should be read in conjunction with
the Company's  audited  financial  statements and notes thereto  included in its
Annual Report on Form 10-K for the year ended December 31, 2002.

The  accompanying  unaudited  condensed  consolidated  financial  statements  of
Communication  Intelligence  Corporation  and its  subsidiary  (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 quarterly
report reflect all adjustments (consisting only of normal recurring adjustments)
which the Company  considers  necessary for a fair presentation of its financial
position at the dates presented and the Company's results of operations and cash
flows  for  the  periods  presented.  The  Company's  interim  results  are  not
necessarily indicative of the results to be expected for the entire year.

The Company develops and markets software that can verify handwritten signatures
and electronic  signature and handwritten data entry software solutions aimed at
emerging,  large  potential  markets such as  e-commerce,  workflow  automation,
corporate     security,      mobile     voice/Internet     devices     including
smartphones/communicators, PDAs, webpads and the Palm OS aftermarket.

The  Company's  core  software  technologies  include  multilingual  handwriting
recognition systems (Jot(R)) and the Handwriter(R)  Recognition System, referred
to  as  HRS(TM),   electronic  signature,   biometric  signature   verification,
cryptography,   electronic  ink  recording  tools   (InkTools(R)),   Sign-it(R),
iSign(TM) and  Sign-On(TM),  and operating  systems  extensions  that enable pen
input (PenX(TM)).

Other consumer and original  equipment  manufacturer  ("OEM")  products  include
electronic  notetaking  (QuickNotes(TM)  and  InkSnap(TM))  and predictive  text
input,  (WordComplete(R)).  CIC's  products are designed to increase the ease of
use,  functionality  and security of electronic  devices with a primary focus on
wireless  internet  and  information  devices  such as  smartphones,  electronic
organizers ("PDA's") and portable web browsers.

The Company offers a wide range of multi-platform  software products that enable
or enhance pen-based  computing.  The Company's core technologies are classified
into two broad  categories:  "natural input  technologies"  and "transaction and
communication enabling technologies". Natural input technologies are designed to
allow  users  to  interact  with a  computer  or  handheld  device  by  using an
electronic pen or "stylus" as the primary input device or in conjunction  with a
keyboard.   CIC's  natural  input  offerings  include  multilingual  handwriting
recognition systems,  software keyboards,  predictive text entry, and electronic
ink  capture  technologies.  Many  small  handheld  devices  such as  electronic
organizers,  pagers and smart cellular  phones do not have a keyboard.  For such
devices,  handwriting  recognition and software keyboards offer viable solutions
for performing text entry and editing.  CIC's  predictive text entry  technology
simplifies  data entry even  further by  reducing  the number of actual  letters
required to be entered.  The Company's ink capture  technologies  facilitate the
capture  of  electronic  ink  for  notetaking,  drawings  or  short  handwritten
messages.  The Company's transaction and communication enabling technologies are
designed to provide a cost-effective means for securing electronic transactions,
providing network and device access control, and enabling workflow automation of
traditional paper form processing.  CIC believes that these  technologies  offer
more efficient methods for conducting  electronic  transactions and provide more
functional  user  authentication  and heightened  data  security.  The Company's
transaction and communication enabling technologies have been fundamental in its
development  of software for signature  verification,  data  security,  and data
compression.

                                      -7-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
         Notes to Unaudited Condensed Consolidated Financial Statements
                    (In thousands, except per share amounts)
                                    FORM 10-Q

Going Concern

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue as a going  concern.  The Company has suffered  recurring
losses  from  operations  that raise a  substantial  doubt  about its ability to
continue  as a going  concern.  At March 31,  2003,  the  Company's  accumulated
deficit  was  approximately  $80  million.  The  Company  filed  a  registration
statement  with  the  Securities  and  Exchange  Commission  that  was  declared
effective  February 2003,  pursuant to the line of credit agreement with Cornell
Capital  Partners,  LP  ("Cornell"),  (see  Note 4).  However,  there  can be no
assurance that the Company will have adequate capital  resources to fund planned
operations  or that  additional  funds will be  available  to the  Company  when
needed,  or if  available,  will be available  on favorable  terms or in amounts
required by the  Company.  If the Company is unable to obtain  adequate  capital
resources  to fund  operations,  it may be  required  to  delay,  scale  back or
eliminate  some or all of its  operations,  which  may have a  material  adverse
effect on the Company's  business,  results of operations and ability to operate
as a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

2. Cash and cash equivalents

     The  Company   considers  all  highly  liquid   investments  with  original
maturities of up to 90 days to be cash equivalents.

       Cash and cash equivalents consist of the following:

                                           March 31,              December 31,
                                             2003                    2002
                                    --------------------- -- -------------------

        Cash in bank                 $        340             $        260
        Money market                          596                      451
                                    ---------------------    -------------------
                                     $        936             $        711
                                    =====================    ===================

3. Inventories

Inventories  are  stated at the lower of cost or market,  cost being  determined
using the first-in,  first-out  (FIFO)  method.  At March 31, 2003,  inventories
consisted primarily of finished goods.

4. Short-term debt

In February 2003, Cornell advanced the Company $1 million (the "Advance"),  net,
of a 6.5%  financing  fee against the Equity Line of Credit  Agreement  existing
between  Cornell and the Company.  The advance is due in full within 72 days. If
the Advance is not paid in full when due, the  outstanding  principal owed shall
be due and payable in full  together  with interest at a rate of 6% per annum or
the highest  permitted by  applicable  law. The Advance  required the Company to
place in escrow 1,000  shares of its common  stock.  As of March 31,  2003,  the
Company repaid $400,000 of the Advance by issuing 2,041,052 shares of its common
stock pursuant to the terms of the Equity Line of Credit Agreement (See Note 9).

5. Related Party Transactions

On June 19, 2001, the Company consummated a three-year $3 million financing (the
"Loan") with a charitable remainder annuity trust of which a former director and
officer of the Company is a trustee (the "Trust"). The proceeds of the Loan were
used to refinance $1,500 of indebtedness  outstanding to the Trust pursuant to a
loan made by the Trust to the Company in October  1999 and for  working  capital
purposes.

                                      -8-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
         Notes to Unaudited Condensed Consolidated Financial Statements
                    (In thousands, except per share amounts)
                                    FORM 10-Q

5. Related Party Transactions (continued)

The Loan bears interest at the rate of 2% over the prime rate publicly announced
by Citibank N.A. from time to time, which was 6.75% per annum at March 31, 2003,
and is due June 18, 2004. The Loan may be pre-paid by the Company in whole or in
part at any time without  penalty,  subject to the right of the Trust to convert
the  outstanding  principal  amount  of the Loan into  shares  of common  stock.
Pursuant to the terms of the Loan,  the Trust has the option,  at any time prior
to maturity,  to convert all or any portion of the outstanding  principal amount
of the Loan into shares of common stock of the Company at a conversion  price of
$2.00 per share,  subject to adjustment  upon the occurrence of certain  events.
If,  prior  to  maturity  of the  Loan,  the  Company  consummates  one or  more
financings  providing  $5  million  or more in gross  proceeds,  the  Company is
required  to apply  50% of the  proceeds  in excess  of $5  million  to the then
outstanding  principal  amount  of the  Loan.  The  Loan is  secured  by a first
priority  security  interest in and lien on all of the  Company's  assets as now
owned or hereafter acquired by the Company.

In connection  with the Loan,  the Company  entered into a  registration  rights
agreement  with the Trust which  obligates  the  Company to file a  registration
statement with the Securities and Exchange  Commission  covering the sale of the
shares of the Company's  common stock issuable upon conversion of the Loan if it
receives a demand by the holder of the Loan to do so, and to use its  reasonable
best efforts to cause such  registration  statement to become  effective.  As of
March  31,  2003,  no  demand  had been  made  upon the  Company  to filed  this
registration statement.

Interest  paid during the three months ended March 31, 2003 and 2002 was $50 and
$56, respectively.

6. Net loss per share

The Company  calculates  earnings per share under the provisions of Statement of
Financial  Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). SFAS
128 requires the disclosure of both basic earnings per share,  which is based on
the weighted  average  number of shares  outstanding,  and diluted  earnings per
share,  which is based on the  weighted  average  number of shares and  dilutive
potential  shares  outstanding.  For the three month period ended March 31, 2003
and 2002,  potential  equivalent shares excluded from the calculation of diluted
earnings per share,  as their effect is not  dilutive,  include stock options of
6,358, and 7,518, respectively.

7. Comprehensive income

   Total comprehensive (loss) was as follows:

                                               Three month Ended March 31,
                                       ------------------ ------ ---------------
                                               2003                     2002
                                        -----------------        ---------------

    Net loss                             $     (310)              $     (688)
    Other comprehensive income:
    Cumulative translation adjustment             2                        3
                                        -----------------        ---------------

         Total comprehensive loss        $     (308)              $     (685)
                                        =================        ===============

8. Segment Information

The Company  identifies  reportable  segments by  classifying  revenues into two
categories:   handwriting   recognition  and  system  integration.   Handwriting
recognition   software  is  an  aggregate  of  three  revenue  categories.   All
handwriting   recognition  software  is  developed  around  the  Company's  core
technology.  System  integration  represents the sale and  installation of third
party computer  equipment and systems that utilize the Company's  products.  All
sales represent sales to external customers.

                                      -9-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
         Notes to Unaudited Condensed Consolidated Financial Statements
                    (In thousands, except per share amounts)
                                    FORM 10-Q

8. Segment Information (continued)

The accounting policies followed by the segments are the same as those described
in the "Critical Accounting  Policies." Segment data includes revenues,  as well
as allocated costs charged to each of the operating segments.

       The table below presents information about reporting segments for the
periods indicated:

                                  Three months ended March 31,
                            2003                              2002
                -------------------------------  -------------------------------
                Handwriting   Systems            Handwriting  Systems
                Recognition Integration  Total   Recognition Integration  Total
                ----------- ----------- -------  ----------- ----------- -------

Revenues            $  829   $   279    $ 1,108    $    859   $   298   $ 1,157
Loss from
Operations          $ (221)  $   (39)   $  (260)   $   (586)  $   (37)  $  (623)
Significant change
in Total long
lived assets from
Year End            $    -   $     -    $     -    $      -   $   (35)  $     -


For the three months ended March 31, 2003 and 2002 one  customer  accounted  for
40% and 33% of total handwriting recognition segment revenue,  respectively. For
the three months ended March 31, 2003 and 2002 one  customer  accounted  for 23%
and 50% of system integration revenues, respectively.

9. Subsequent Events

In April of 2003, the Company repaid the $600,000  remaining on the Advance (see
Note 4) by issuing  3,266,194  shares of its common stock to Cornell.  Also,  in
April,  Cornell  advanced the Company an  additional  $1 million,  net of a 6.5%
financing fee, against the Equity Line of Credit  Agreement.  The second advance
is due in full within 105 days.  If the second  Advance is not paid in full when
due, the  outstanding  principal  owed shall be due and payable in full together
with  interest at a rate of 6% per annum or the highest  permitted by applicable
law. The Second Advance  required the Company to place in escrow 3,000 shares of
its common stock. This second advance is scheduled to be repaid, pro rata over a
ten-week period  commencing the second week of May 2003, via the issuance of the
Company's  common  stock to Cornell  pursuant to the terms of the Equity Line of
Credit Agreement.


                                      -10-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q


Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations


     The following  discussion and analysis  should be read in conjunction  with
the Company's unaudited condensed  consolidated  financial  statements and notes
thereto  included  in Part 1, Item 1 of this  quarterly  report on Form 10-Q and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  set  fourth  in the  Company's  Annual  report on Form 10-K for the
fiscal year ended December 31, 2002.

Overview

     History.  The Company  was  initially  incorporated  in Delaware in October
1986. In each year since its inception, the Company has incurred losses. For the
five-year  period  ended  December  31,  2002,   operating   losses   aggregated
approximately $13.9 million and at December 31, 2002, the Company's  accumulated
deficit  was  approximately  $80  million.  At March  31,  2003,  the  Company's
accumulative deficit was approximately $80 million.

Critical Accounting Policies

     The  preparation  of  financial   statements  and  related  disclosures  in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make judgments,  assumptions and estimates that
affect the amounts  reported in our  consolidated  financial  statements and the
accompanying  notes.  The  amounts of assets  and  liabilities  reported  in our
balance sheets and the amounts of revenues and expenses reported for each period
presented are affected by these  estimates and  assumptions  which are used for,
but not  limited  to, the  accounting  for the product  returns,  allowance  for
doubtful accounts,  intangible asset impairments,  and inventory. Actual results
may differ from these estimates.  The following critical accounting policies are
significantly  affected by  judgments,  assumptions  and  estimates  used by our
management in the preparation of the consolidated financial statements.

     Revenue is recognized when earned in accordance with applicable  accounting
standards,  including  AICPA  Statement of Position  ("SOP") No. 97-2,  Software
Revenue Recognition,  as amended, Staff Accounting Bulletins 101 ("SAB 101") and
the interpretive  guidance issued by the Securities and Exchange  Commission and
EITF issue 00-21 of the AICPA Emerging Issues Task Force. We recognize  revenues
from sales of software products upon shipment, provided that persuasive evidence
of an  arrangement  exists,  collection  is  determined  to be  probable  and no
significant obligations remain. Revenue from service subscriptions is recognized
as costs are incurred or over the service period.

     Revenue from software license agreements is recognized upon delivery of the
software provided that persuasive evidence of an arrangement exists,  collection
is determined to be probable and no  significant  obligations  remain.  Deferred
revenue is recorded for post  contract  support and is  recognized  as costs are
incurred or over the support period.  Vendor specific  objective evidence of the
fair value of the elements  contained in these  software  license  agreements is
based on the price determined by management  having the relevant  authority when
the element is not yet sold separately.

     Revenue from system integration  activities is recognized upon installation
provided that  persuasive  evidence of an  arrangement  exists,  no  significant
obligations remain and the collection of the resulting receivable is probable.

     The  allowance  for  doubtful  accounts is based on our  assessment  of the
collectibility of specific customer accounts and an assessment of international,
political and economic risk as well as the aging of the accounts receivable.  If
there  is a change  in  actual  defaults  from our  historical  experience,  our
estimates  of  recoverability  of amounts due us could be  affected  and we will
adjust the allowance accordingly.

     We perform  intangible  asset  impairment  analysis on a quarterly basis in
accordance with the guidance in Statement of Financial  Accounting  Standard No.
142,  Goodwill  and Other  Intangible  Assets  ("SFAS  No.  142") and  Financial
Accounting  Standard No. 144,  Accounting for the Impairment or Disposal of Long

                                      -11-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q

Lived  Assets  ("SFAS  No.  144").  We use SFAS 144 in  response  to  changes in
industry and market conditions that affect our patents, we then determine if an
impairment of our assets has occurred.

     Sources of Revenues.  To date,  the  Company's  revenues  have been derived
principally  from  end-users,  manufacturers,   retailers  and  distributors  of
computer  products in North  America,  Europe and the Pacific  Rim.  The Company
performs  periodic  credit  evaluations  of its  customers  and does not require
collateral.   The  Company  maintains  reserves  for  potential  credit  losses.
Historically,  such  losses  have been  insignificant  and  within  management's
expectations.

     Software Development Costs. Software development costs are accounted for in
accordance with Statement of Financial  Accounting Standards No. 86, "Accounting
for the Costs of Computer  Software to be Sold,  Leased or  Otherwise  Marketed"
("SFAS 86"). Under SFAS 86,  capitalization of software development costs begins
upon the establishment of technological  feasibility,  subject to net realizable
value considerations.  In the Company's case,  capitalization commences upon the
completion  of a  working  model and  generally  ends  upon the  release  of the
product. The capitalized costs are amortized to cost of sales on a straight line
basis over the estimated life of the product, generally three years. As of March
31, 2003 and 2002, such costs were insignificant.

     Research and  Development.  Research and  development  costs are charged to
expense as incurred.

     Foreign Currency  Translation.  We consider the functional  currency of the
Joint Venture to be the respective  local currency and,  accordingly,  gains and
losses from the translation of the local foreign currency  financial  statements
are included as a component of  "accumulated  other  comprehensive  loss" in our
consolidated  balance  sheets.  Foreign  currency  assets  and  liabilities  are
translated  into U.S.  dollars at exchange  rates  prevailing  at the end of the
period,  except for  non-monetary  assets and liabilities that are translated at
historical  exchange rates.  Revenues and expenses are translated at the average
exchange rates in effect during each period,  except for those expenses included
in balance sheet accounts, which are translated at historical exchange rates.

     Net  foreign  currency   transaction  gains  and  losses  are  included  as
components of "interest income and other income (expense), net" in the Company's
consolidated  statements of operations.  Due to the stability of the currency in
China, net foreign currency  transaction  gains and losses were not material for
the three months ended March 31, 2003 and 2002, respectively.

     Net  Operating  Loss  Carryforwards.   Utilization  of  the  Company's  net
operating  losses may be subject to an annual  limitation  due to the  ownership
change  limitations  provided by the  Internal  Revenue Code of 1986 and similar
state  provisions.  As a result,  a portion of the Company's net operating  loss
carryforwards may not be available to offset future taxable income.  The Company
has provided a full valuation  allowance for deferred tax assets at December 31,
2002 of $28 million based upon the Company's history of losses.

Segments

     We report in two segments: handwriting recognition and systems integration.
For purposes of  Management  Discussion  and Analysis,  handwriting  recognition
includes  online/retail  revenues and corporate sales,  including enterprise and
original equipment  manufacturers ("OEM") revenues. All handwriting  recognition
software  is  developed  around  our core  technology.  Handwriting  recognition
product revenues are generated  through our web site and a direct sales force to
individual or enterprise end users. We also license a version of our handwriting
recognition software to OEM's. The handwriting  recognition software is included
as part of the OEM's  product  offering.  From time to time,  we are required to
develop an interface (port) for our software to run on a new customer's hardware
platform or within the customer's  software  operating  system.  The development
contract revenues are included in the handwriting  recognition  segment.  System
integration  represents  the  sale and  installation  of  third  party  computer
equipment and systems that utilize our products.  System  integration  sales are
derived through a direct sales force which then develops a system to utilize our
software  based on the customers  requirements.  Systems  integration  sales are
accomplished solely through our Joint Venture.

                                      -12-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q

Results of Operations

     The following table provides  unaudited  financial  information for each of
our two segments.


                                               Three Months Ended
                                                     March 31,

                                          2003                       2002
                                  -------------------         ------------------
                                  -------------------         ------------------
Segment revenues:
  Handwriting recognition
    Online                                $     114                  $     124
    Corporate                                   667                        698
    China                                        48                         37
                                   ------------------         ------------------
Total Handwriting recognition             $     829                  $     859

Systems integration
    China                                       279                  $     298
                                   ------------------        -------------------
Total revenues                            $   1,108                  $   1,157
                                   ------------------        -------------------
Cost of Sales
    Handwriting recognition               $      16                  $     226
    Systems integration                         217                        215
                                   ------------------        -------------------
 Total cost of sales                      $     233                  $     441
                                   -------------------       -------------------

Operating cost and expenses
   Research and development               $     340                  $     412
   Sales and Marketing                          283                        387
   General and administrative                   512                        540
                                   ------------------         ------------------
 Total operating costs and expenses       $   1,135                  $   1,339
                                   ------------------         ------------------

Interest and other income
 (expense) net                            $     (50)                 $     (65)
                                    -----------------         ------------------

Net loss                                  $    (310)                 $    (688)
                                    =================         ==================

Amortization of intangible assets
   Cost of sales                          $       3                  $       3
   General and administrative                    95                         98
                                    -----------------         ------------------

Total amortization of
 intangible assets                        $      98                  $     101
                                    =================         ==================

Revenues

Handwriting recognition.

     Handwriting  recognition segment revenues include online/retail,  corporate
and China software sales.  Handwriting  recognition segment revenues declined 3%
or $30 to $829 for the three  months ended March 31, 2003 as compared to $859 in
the comparable prior year period.

     Online/retail  revenues declined 8% or $10 for the three months ended March
31,  2003  compared  to  the  prior  year  period.  The  decrease  is due to the
curtailment  of the direct mail campaign at the end of the second  quarter 2002,
due to the reduced  availability  of new names and poor sales  close  rate.  The
reduction to  online/retail  revenues due to the  curtailment of the direct mail
campaign  was offset by the  positive  effect of the  November  2002  PalmSource
decision  to  replace  Graffiti(R)  with  CIC's  Jot as the  standard  and  only
handwriting  software on all new Palm PoweredTM  devices.  The Company  believes
that  the  November  2002  PalmSource   decision  and  subsequent  January  2003
announcement  has had a  positive  effect  on its  online/retail  product  sales
resulting  in a 73%  increase  in  online/retail  sales  compared  to the fourth
quarter 2002. The Company  cannot predict the duration of the favorable  benefit
provided by the PalmSource announcement and has no plans to reinstate its direct
mail  campaigns  in the near  future.  In  March  2003 the  Company  launched  a
multi-channel  marketing  campaign based on its  JotComplete(TM),  advanced text
input software solution. Co-Partners include leading hardware manufacturers, the
primary  online  Palm(TM)  software  supplier  and  a  leading  retail  software
publisher.  It is too early to  project  the  revenues  associated  with the new
multi-channel marketing campaign.

     Corporate  revenues decreased 4%, or $31, over the three months ended March
31, 2003 compared to the prior year period.  OEM revenues  included in corporate
sales  decreased  58% or $62 over the three months ended March 31, 2003 compared
to the prior year period.  This  decrease was primarily due to a decrease in the
amount of  development  contract  revenue  recognized  for porting the Company's
software to third  party  operating  systems as compared to the prior year.  The

                                      -13-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q

Company believes Palm Source's replacement of Graffiti(R) with the Company's Jot
product as the standard and only handwriting  software on all new Palm PoweredTM
devices will increase OEM revenues in 2003. However, the poor economy and Palm's
prediction of declines in projected shipments of its products may limit or delay
the Company's anticipated increases in OEM revenues to later in 2003. Enterprise
sales included in corporate  sales increased 6%, or $33, during the three months
ended March 31, 2003 compared to the prior year period. The Company believes the
$575  increase  in  enterprise  revenue  from the  fourth  quarter of 2002 is an
encouraging  indicator of possible trends in IT spending.  The Company  believes
that IT spending and economic  health will be the  limiting  factors  related to
near term deployment revenue potential.

     Software sales in China  increased 30%, or $11, over the three months ended
March 31, 2003 compared to the prior year period.  The minor  increase  reflects
primarily  the need to expand sales  coverage  from a  traditional  focus on the
local  Nanjing and Jiangsu  Province  markets to other  provinces in China.  The
Company  hired a new general  manager to  implement  the  expansion of its sales
efforts into other provinces.

Systems Integration.

     System  integration  segment  revenue  declined  6%, or $19,  for the three
months  ended March 31, 2003  compared to the prior year  period.  The  decrease
primarily  reflects the need for the Joint Venture to expand sales coverage from
a traditional  focus on the local Nanjing and Jiangsu  Province markets to other
provinces  with in China.  The Company hired a new general  manager to implement
the expansion of its sales efforts into other provinces.

Cost of Sales

Handwriting recognition segment.

     Handwriting  recognition  segment  cost of  sales  includes  online/retail,
corporate and China software sales costs.  Such costs are made up of royalty and
import tax payments,  third party hardware costs, direct mail costs, engineering
direct costs and amortization of intangible  assets excluding  patents.  Cost of
sales for the handwriting  recognition  segment decreased 94% or $212 during the
three months ended March 31, 2003 compared to the prior year period.

     Online/retail  cost of sales  decreases  99% or $162 during the three month
period ended March 31, 2003 compared to the prior year period.  The decrease was
due to the elimination of the direct mail campaign and related costs as a result
of reductions in the number of names  available and a poor sales close rate. The
Company does not  anticipate a material  increase is costs  associated  with the
multi-channel JotComplete(TM) campaign discussed above.

     Enterprise and OEM cost of sales  decreased  80%, or $45,  during the three
months ended March 31, 2003 compared to the prior year period.  The decrease was
due  to  the  lower  volume  of  third  party  hardware  sales  and  engineering
development costs over the comparable three month period of the prior year.

     China handwriting  recognition  segment cost of sales decreased 83%, or $5,
during the three month  period  ended March 31, 2003  compared to the prior year
period.  The  increase is due  primarily  to lower third  party  hardware  costs
associated with the sale of the software compared to the prior year period.

                                      -14-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q

Systems Integration.

     China Systems  integration  segment cost of sales increased 1%, or $2, over
the three month period  ended March 31, 2003 as compared to the prior year.  The
increase in costs was due primarily to the reduction in price on certain  orders
received in the current  three months ended March 31, 2003 compared to the prior
year period. See revenue discussion above.

Operating expenses

     Research  and  development  expenses.  Research  and  development  expenses
decreased  17%,  or $72,  to $340 for the three  months  ended March 31, 2003 as
compared  to  $412  in the  prior  year  period.  Engineering  expenses  consist
primarily of salaries and related costs, outside engineering, maintenance items,
and  allocated   facilities   expenses.   These   expenses  are  offset  by  the
capitalization  of software  development  costs and direct costs associated with
nonrecurring  engineering  contracts  charged  to cost of  sales.  Salaries  and
related expenses decreased 11%, or $27, compared to the three months ended March
31,  2002 due  primarily  to the  reduction  in head  count of three  engineers.
Professional  services  declined 100%, or $30, due to the elimination of outside
engineering  support compared to the three month period in the prior year. Other
engineering   administrative   costs  including  allocated  facilities  expenses
declined 1%, or $15,  during the three  months ended March 31, 2003  compared to
the prior year period.  The Company  believes that the reductions in engineering
head count and expenses  will not have an adverse  effect on its ability to cope
with the current  requirements.  The Company  maintains its relationship with an
outside  engineering  group  familiar  with its products  and, if required,  can
engage them on an as needed basis to fill future  engineering  requirements.  In
addition  the  Company draws on the  engineering  capabilities  of the
Joint Venture as required.

     Sales and marketing expenses. Sales and marketing expenses declined 27%, or
$104, to $283 for the three months ended March 31, 2003 compared to $387 for the
comparable three month period in 2002.  Sales and marketing  expenses consist of
salaries,  commissions and related expenses,  professional services, advertising
and promotion,  general office and allocated facilities  expenses.  Salaries and
related expenses declined 18%, or $27, for the three months ended March 31, 2003
compared to the prior year period.  The decline is salaries and related  expense
is due to the reduction of one sales person  compared to the three months in the
prior year period.  The Company is currently  working on a channel strategy that
will increase the amount of market  coverage by utilizing the sales force of the
channel partners.  CIC has signed several new agreements since December 31, 2002
that the  Company  believes  will  begin to produce  revenues  in the near term.
Professional  services  declined  100%,  or $51,  during the current three month
period compared to the prior year period. The decline is primarily due to $37 in
outside  commission expense and $14 in salaries expense paid to an outside sales
consultant  during  the  three  months  ended  March  31,  of  the  prior  year.
Advertising  expense  decreased  100%, or $10,  compared to the prior year. This
decrease is due to the  discontinuance  of in the box  advertising  in the first
three months of 2003 compared to the prior year period.

     General and Administrative  Expenses.  General and administrative  expenses
decreased  5%,  or $28,  to $512 for the three  months  ended  March  31,  2003,
compared to $540 in the prior year period.  General and  administrative  expense
consists of salaries,  professional fees,  investor relations  expenses,  patent
amortization  and office and  allocated  facilities  costs.  Salaries  and wages
increased  6%, or $10, for the three months ended March 31, 2003 compared to the
three month  period last year,  due to salary  increases.  Professional  service
expenses which include  consulting,  legal and outside accounting fees decreased
19%, or $23,  compared to the three month period in the prior year. The decrease
was  primarily  due  to  lower  consulting   service  fees  resulting  from  the
resignation  of the former  Chairman of the Board and the  elimination of $19 in
related salary and office fees and $4 in other  professional  fees for the three
months  ended March 31,  2003  compared  to last year.  The Company  reduced its
provision for  uncollectable  accounts by 67%, or $6, for the three months ended

                                      -15-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q

March 31, 2003 due to collection of certain  accounts fully reserve for in prior
periods.  The Company believes its uncollectible  accounts provision is adequate
at the present time. Other administrative  expenses declined 4%, or $9, over the
three month period ended March 31, 2003  compared to the prior year period.  The
decrease was primarily due to a reduction in travel  related  expenses of $4 and
allocated facilities expense of $3.

Interest and other income (expense), net

     Interest and other income (expense), net decreased 92%, or $12, compared to
the three  months  ended  March 21 2002.  The  decrease  in expense was due to a
refund in value added tax from 2002 received by the Joint Venture.

Interest expense

     Interest  expense  decreased 6% or $3 over the three months ended March 31,
2003 compared to the three months in the prior year.  The decrease was primarily
due to the decrease in the interest rate paid on the Company's  $3,000 debt over
the comparable three month period.

Liquidity and Capital Resources

     At March 31, 2003, cash and cash equivalents  totaled $936 compared to cash
and cash  equivalents  of $711 at December  31,  2002.  The increase in cash was
primarily due to financing activities through Cornell Capital Partners,  LP. The
Company  incurred  $600 in short  term debt and  received  $113 from the sale of
stock,  net of issuance costs  associated with the preparation and filing of the
S-1 in February  2003. The $600 short term note was repaid in April 2003 through
the sale of additional  shares of the Company's common stock.  This increase was
offset by $485 used in operating  activities,  and by payments of capital  lease
obligations of $3. Total current assets were $2,118 at March 31, 2003,  compared
to $1,545 at December 31, 2002. As of March 31, 2003,  the  Company's  principal
sources of funds included its cash and cash equivalents aggregating $936 and the
Equity Line of Credit through Cornell Capital Partners LP.

     Accounts  receivable  increased  $414 for the three  months ended March 31,
2003  compared to December  31,  2002,  due  primarily  to the increase in sales
during the period.  The Company  believes  the  financial  results for the first
quarter  together  with our  current  sales  activity  appear to confirm  recent
surveys,   including  studies  from  UAB  Warburg  and  Celent   Communications,
indicating IT spending will increase this year despite the current  geopolitical
and economic uncertainties.

     Prepaid  expenses  declined  $47 for the three months ended March 31, 2003,
compared  to  December  31,  2002,  due  to  expensing  through  operations  the
appropriate   quarterly   amounts.   Generally  annual  insurance  premiums  and
maintenance fees are prepaid in December and June of each year.

     Accounts payable  increased $185 for the three months ended March 31, 2003,
compared to December 31, 2002, due to the fees  associated  with both the annual
audit and the preparation and filing of the Registration  Statement on Form S-1.
Accrued compensation  decreased $27 due to the elimination of four positions and
related  personal late in March 2003. The Company  believes that the elimination
of the  positions  will not have an  negative  impact on its  ability to conduct
business on a going forward basis.

     The Company has  suffered  recurring  losses from  operations  that raise a
substantial doubt about its ability to continue as a going concern. At March 31,
2003, the Company's accumulated deficit was approximately $80 million. There can
be no assurance  that the Company will have adequate  capital  resources to fund
planned  operations  or that any  additional  funds will be available to it when
needed,  or if  available,  will be available  on favorable  terms or in amounts
required by it. If the Company is unable to obtain adequate capital resources to
fund  operations,  it may be required to delay,  scale back or eliminate some or
all of its operations, which may have a material adverse effect on its business,
results of operations and ability to operate as a going  concern.  The financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

                                      -16-
<PAGE>

                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q

     The Company intends to use the net proceeds from the issuance of the shares
of its common stock under the Equity Line of Credit to repay short term debt and
for working capital.  In addition,  fifty percent of any such funds in excess of
$5  million  must be  applied  to the  outstanding  principal  of the  Company's
long-term  debt. CIC believes the proceeds from the Equity Line of Credit,  when
combined  with cash  provided  from  operations,  will be sufficient to meet its
capital  requirements  for the foreseeable  future.  If the Company is unable to
secure at least $5 million in funds under the Equity Line of Credit or is unable
to increase  substantially funds generated from operations,  the Company may not
be able to continue its operations in their current form and may not be a viable
company on a going forward basis without  significant changes in its operations.
The  Company  believes  it will be able to raise the  necessary  funds under the
Equity  Line of Credit  and from  operations.  The  Company  has not  formulated
specific plans to change its operations.  Possible changes could include reduced
personnel  expenses to better  match its revenue  stream.

     Current liabilities,  which include deferred revenue,  were $1,744 at March
31, 2003 compared to $1,102 at December 31, 2002. Deferred revenue, totaling $67
at March 31, 2003,  compared to $165 at December 31,  2002,  primarily  reflects
advance payments for products and maintenance fees from the Company's  licensees
which are generally  recognized  as revenue by the Company when all  obligations
are met or over the term of the maintenance agreement.

We have the following material commitments as of March 31, 2003:


                                              Payments Due by Period
                                                     One to  Four to      After
                                         Less than    three   five        five
Contractual Obligations          Total    one year    years   years       years
                               --------- ----------  ------  --------   --------

Short-term debt                 $   600    $   600    $   -    $   -     $    -
Long-term debt (1)                3,000          -    3,000        -          -
Capital lease obligations            35          6       23        6          -
Operating lease commitments (2)   1,579        407    1,172        -          -
                               ---------  ---------  -------  -------    -------

Total contractual cash
obligations                     $ 5,214    $ 1,013   $4,195    $   6     $    -
                               ========== =========  =======  =======    =======

1.   The  Long-term  debt may be  pre-paid by the Company in whole or in part at
     any time without  penalty,  subject to the right to convert the outstanding
     principal amount into shares of common stock at a conversion price of $2.00
     per share, subject to adjustment upon the occurrence of certain events.

2.   The operating  lease  commenced on November 1, 2001.  The cost of the lease
     will increase  approximately 3% per annum over the term of the lease, which
     expires on October 31, 2006.

Forward Looking Statements

     Certain  statements  contained  in this  quarterly  report  on  Form  10-Q,
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
Securities  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:


o    Technological,   engineering,   manufacturing,  quality  control  or  other
     circumstances which could delay the sale or shipment of products;

o    Economic,  business,  market and  competitive  conditions  in the  software
     industry and  technological  innovations  which could affect the  Company's
     business;

                                      -17-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q

o    The Company's  inability to protect its trade secrets or other  proprietary
     rights,  operate without  infringing upon the proprietary  rights of others
     and  prevent  others  from  infringing  on the  proprietary  rights  of the
     Company; and

o    General economic and business conditions and the availability of sufficient
     financing.

     The Company  undertakes  no  obligation  to  publicly  update or revise any
forward-looking  statements,  as a result of new  information,  future events or
otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

     The Company has an investment portfolio of fixed income securities that are
classified  as  cash  equivalents.  These  securities,  like  all  fixed  income
instruments,  are  subject to  interest  rate risk and will fall in value if the
market interest rates increase.  The Company  attempts to limit this exposure by
investing  primarily in short term securities.  The Company has not entered into
any  short-term  security  investments  during the three  months ended March 31,
2003.

Foreign Currency Risk

     From time to time,  the Company  makes certain  capital  equipment or other
purchases  denominated in foreign  currencies.  As a result,  the Company's cash
flows and earnings  are exposed to  fluctuations  in interest  rates and foreign
currency  exchange rates. The Company attempts to limit these exposures  through
operational strategies and generally has not hedged currency exposures.

Future Results and Stock Price Risk

     The Company's  stock price may be subject to  significant  volatility.  The
public stock markets have experienced  significant volatility in stock prices in
recent  years.  The  stock  prices  of  technology  companies  have  experienced
particularly high volatility, including, at times, severe price changes that are
unrelated or  disproportionate  to the operating  performance of such companies.
The  trading  price of the  Company's  common  stock  could be  subject  to wide
fluctuations 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.

Item 4. Controls and Procedures

     Under  the  supervision  and  with  the   participation  of  the  Company's
management,  including the Company's Chief Executive Officer and Chief Financial
Officer, the Company has evaluated the effectiveness of the design and operation
of its  disclosure  controls  and  procedures  pursuant  to  Exchange  Act  Rule
13a-14(c) within 90 days of the filing date of this quarterly  report.  Based on
that evaluation,  the Chief Executive  Officer and Chief Financial  Officer have
concluded that these  disclosure  controls and  procedures are effective.  There
were no  significant  changes in the  Company's  internal  controls  or in other
factors that could significantly affect internal controls subsequent to the date
of their evaluation.

Part II-Other Information

Item 1. Legal Proceedings

     The  Company was named as a defendant  in a suit  brought in U.S.  District
Court for the  Southern  District  of New York,  filed on August 5,  2002,  case
number  02-CV-6197.  The  plaintiffs,  Richard M. Ross and Jane  Spaulder  Ross,
brought  claims for breach of contract,  conversion,  negligence  and  statutory
violations, alleging that the Company provided incorrect or false information to
plaintiffs' stockbroker, thereby delaying the sale of their shares in the

                                      -18-
<PAGE>
                     Communication Intelligence Corporation
                                 and Subsidiary
               (In thousands, except share and per share amounts)
                                    FORM 10-Q

Company and causing a loss in excess of $500,000.  While the litigation is in an
early  stage,  based on the  available  information,  we do not believe that the
action will  ultimately  have a material  financial  impact on the  Company.  We
believe  that the claims are without  merit and we intend to  vigorously  defend
against them.

     In a separate  arbitration  proceeding the plaintiffs  have brought similar
claims for relief against  Charles  Schwab & Co., Inc.,  their broker during the
period in question, based upon other legal theories.

Item 2. Change in Securities

        None

Item 3. Defaults Upon Senior Securities

        None

Item 4. Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------

        None

Item 5. Other Information

        None

Item 6. Exhibits and Reports on Form 8-K

(a)     Exhibits

        Certification of Chief Executive Officer and Chief Financial Officer

(b) Reports on Form 8-K

        Current Report on Form 8-K dated February 13, 2003, with respect to:

1. the effective date of the Company's Registration Statement on Form S-1.

2. the Company's audited financial results for the year ended December 31, 2003.

3. the Company's options regarding continued listing of its common stock on the
   NASDAQ Small Cap Market.


                                      -19-
<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 13, 2003                          /s/ Francis V. Dane
-----------------------------     --------------------------------------
          Date                                  Francis V. Dane
                                 (Principal Financial Officer and Officer Duly
                                 Authorized to Sign on Behalf of the Registrant)

                            CERTIFICATION PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with  the  quarterly   report  of   Communication   Intelligence
Corporation  (the  "Company") on Form 10-Q for the quarterly  period ended March
31,  2003,  as filed with the  Securities  and Exchange  Commission  on the date
hereof (the "Report"), I, Francis V. Dane, Principal Financial Officer, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes Oxley Act
of 2002, that to the best of my knowledge:

(1)  The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.


By: /s/Francis V. Dane
          Principal Financial Officer

In  connection  with  the  quarterly   report  of   Communication   Intelligence
Corporation  (the  "Company") on Form 10-Q for the quarterly  period ended March
31,  2003,  as filed with the  Securities  and Exchange  Commission  on the date
hereof  (the  "Report"),  I,  Guido  DiGregorio,  Chairman  and Chief  Executive
Officer,  certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the
Sarbanes Oxley Act of 2002, that to the best of my knowledge:

(1)  The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.


By: /s/Guido DiGregorio
          Chairman and Chief Executive Officer


                                      -20-
<PAGE>


                     Communication Intelligence Corporation
                                 and Subsidiary
                                    FORM 10-Q


CERTIFICATION


I, Francis V. Dane, certify that:


1. I  have  reviewed  this  Quarterly  Report  on  Form  10-Q  of  Communication
Intelligence Corporation;


2. Based on my  knowledge,  this  Quarterly  Report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this Quarterly
Report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this Quarterly  Report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this Quarterly Report;


4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;


b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and


c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;


5. The registrant's other certifying officer and I have disclosed,  based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):


a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and


b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 13, 2003

                                              By: /s/ Francis V. Dane
                                            Principal Financial Officer

                                      -21-
<PAGE>




CERTIFICATION


I, Guido DiGregorio, certify that:


1. I  have  reviewed  this  quarterly  report  on  Form  10-Q  of  Communication
Intelligence Corporation;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;


4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;


b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and


c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):


a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and


b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and


6. The  registrant's  other  certifying  officer  and I have  indicated  in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 13, 2003

                            By: /s/ Guido DiGregorio
                            Chairman, Chief Executive Officer


                                      -22-