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: June 30, 2002
                                                  -------------


                                       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 August 6, 2001:
90,721,024.




<PAGE>

                                      INDEX



PART I.  FINANCIAL INFORMATION


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

  Condensed Consolidated Balance Sheets at June 30, 2002 (unaudited) and
  December 31, 2001...........................................................3

  Condensed Consolidated Statements of Operations for the Three
  and Six-Month Periods Ended June 30, 2002 and 2001 (unaudited)..............4

  Condensed Consolidated Statements of Changes in Stockholders'
  Equity for the Three and Six-Month Periods Ended June 30, 2002
  and 2001 (unaudited)........................................................5

  Condensed Consolidated Statements of Cash Flows for the Three and
  Six-Month Periods Ended June 30, 2002 and 2001 (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.........16
          ----------------------------------------------------------

PART II.  OTHER INFORMATION

 Item 1.  Legal Proceedings..................................................16
          -----------------

 Item 2.  Change in Securities...............................................17
          --------------------

 Item 3.  Defaults Upon Senior Securities....................................17
          -------------------------------

 Item 4.  Submission of Matters to a Vote of Security Holders................17
          ---------------------------------------------------

 Item 5.  Other Information..................................................18
          -----------------

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

            (a)      Exhibits................................................18

            (b)      Reports on Form 8-K.....................................18

  Signatures..................................................... ...........19



                                      -2-
<PAGE>

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

                                                     June 30,       December 31,
                                                       2002             2001
                                                   --------------  -------------
                                                     Unaudited
Assets
Current assets:
Cash and cash equivalents.......................... $  1,840         $  2,588
     Accounts receivable, net......................    1,159            1,043
     Inventories...................................      152              129
     Prepaid expenses and other current assets.....      135              139
                                                   ----------      -----------
         Total current assets......................    3,286            3,899

Property and equipment, net........................      128              161
Capitalized software costs.........................       19               26
Patents and trademarks.............................    5,610            5,799
Other assets.......................................      108              187
                                                   ----------      -----------

    Total assets................................... $  9,151         $ 10,072
                                                   ==========      ===========

Liabilities and Stockholders' equity
Current liabilities:
     Short-term debt............................... $      -       $      181
     Accounts payable..............................      285              206
Accrued compensation...............................      289              208
     Other accrued liabilities.....................      204              196
     Deferred revenue..............................      112               88
     Capital Lease Obligations.....................        1                3
                                                   ----------      -----------
         Total current liabilities.................      891              882

Notes payable - noncurrent.........................    3,000            3,000

Minority interest..................................      131              130

Commitments

Stockholders' equity:
     Common stock..................................      914              909
     Additional paid-in capital....................   82,026           81,605
     Accumulated deficit...........................  (77,617)         (76,258)
     Cumulative translation adjustment.............     (194)            (196)
                                                   -----------    ------------
      Total stockholders' equity...................    5,129            6,060
                                                   -----------    ------------

      Total liabilities and stockholders' equity... $  9,151       $   10,072
                                                   ===========     ============

                            See accompanying notes.

                                      -3-

<PAGE>


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

                                          Three Months Ended   Six Months Ended
                                               June 30,            June 30,
                                          ------------------   ----------------
                                             2002      2001      2002     2001
                                          --------   -------   -------   ------
Revenues:
 Online.................................   $   80    $  307   $   204   $  635
 Corporate..............................      708     1,224     1,406    1,767
 Nonrecurring maintenance fees (net)-
   M10 (previously PenOp Inc.)                  -         -         -      352
 China    ..............................      323       372       658      767
                                           -------   -------   -------   ------

     Total revenues.....................    1,111     1,903     2,268    3,521

Operating costs and expenses:
  Cost of sales:
     Online.............................       22       306       185      575
     Corporate..........................       76       157       133      232
     China .............................      205       239       426      517
  Research and development..............      366       494       778      971
  Sales and marketing  .................      427       573       814    1,134
  General and administrative  ..........      639       736     1,179    1,379
                                           -------   -------   -------   ------

       Total operating costs and expenses   1,735     2,505     3,515    4,808
                                           -------   -------   -------   ------

Loss from operations  ...................    (624)     (602)   (1,247)  (1,287)

Interest and other income
  (expense), net  .......................       4         9        (9)      14

Interest expense  .......................     (50)      (98)     (102)    (159)

Minority interest  ......................      (1)       (2)       (1)      (2)
                                           --------  -------  -------   ------

         Net loss  ......................    (671)     (693)   (1,359)  (1,434)
                                           ========  =======  =======  =======

Basic and diluted loss per common share   $ (0.01)  $ (0.01)  $ (0.01)  $ 0.02)
                                           =======   =======   =======  =======
Weighted average common
     shares outstanding  ...............   91,278    90,542    91,113   90,384
                                           =======   ======    ======   ======

                            See accompanying notes.

                                      -4-
<PAGE>

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


                                                              Accumulated
                                     Additional                  Other
                              Common   Paid-In   Accumulated  Comprehensive
                               Stock   Capital    Deficit     Gain (Loss)  Total

Balances as of
 December 31, 2001..           $ 909   $ 81,605    $(76,258)   $ (196)  $ 6,060
                               -------------------------------------------------

Exercise of options for
 148 sharesof Common Stock.....    1        109           -         -       110

Foreign currency translation
  adjustment...................    -          -           -         3         3

Net loss.......................    -          -        (688)        -      (688)
                               -------------------------------------------------

Balances as of March 31, 2002..$ 910   $ 81,714    $(76,946)   $ (193)  $ 5,485
                               -------------------------------------------------

Exercise of options for
 420 sharesof Common Stock....     4        312           -         -       316

Foreign currency translation
  adjustment..................     -          -           -        (1)       (1)

Net loss......................     -          -        (671)        -      (671)
                               -------------------------------------------------

Balances as of June 30, 2002.. $ 914   $ 82,026     $(77,617)  $ (194)  $ 5,129
                               =================================================

                             See accompanying notes.

                                      -5-

<PAGE>

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

                                                            Six Months Ended
                                                                June 30,
                                                       -------------------------
                                                           2002          2001
                                                        ----------    ----------

Cash flows from operating activities:
  Net loss..........................................  $  (1,359)     $  (1,434)
  Adjustments to reconcile net loss to net cash
  (used) in operating activities:
    Depreciation....................................         50             75
    Patent amortization.............................        189            208
    Loan discount amortization......................          -             74
    Non-cash compensation...........................          -             46
    Disposal of fixed assets........................          5              -
    Changes in operating assets and liabilities:
      Accounts receivable, net......................       (116)           205
        Inventories.................................        (23)            86
        Prepaid expenses and other current assets...          4             26
        Other assets................................         79            (16)
        Accounts payable............................         79           (292)
        Accrued compensation........................         81             (2)
        Other accrued liabilities...................          9            (99)
        Deferred revenue............................         24             69
                                                      ----------     -----------

     Net cash (used in) operating  activities.......       (978)        (1,054)
                                                      ----------     -----------

Cash flows from investing activity:
   Acquisition of property and equipment............        (12)           (50)
                                                      ----------     -----------

      Net cash used in investing activity............       (12)           (50)
                                                      ----------     -----------

Cash flows from financing activities:
   Payments on short-term debt.......................      (181)        (1,620)
   Proceeds from acquisition of short-term debt......         -            181
   Proceeds from acquisition of long-term debt.......         -          3,000
   Proceeds from exercise of stock options
   and warrants......................................       426            816
   Principal payments on capital lease obligations...        (3)            (4)
                                                     -----------     -----------

       Net cash provided by financing activities.....       242          2,373
                                                     -----------     -----------

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

Net increase (decrease) in cash and cash equivalents.      (748)         1,269
Cash and cash equivalents at beginning of period.....     2,588          2,349
                                                     -----------     -----------

Cash and cash equivalents at end of period.......... $    1,840      $   3,618
                                                     ===========     ===========

                             See accompanying notes.

                                      -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 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   biometric   electronic   signature
verification  and natural  input  software  solutions  aimed at  emerging,  fast
growth, large potential markets such as e-commerce,  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 Recognition System,  referred to
as   HRS(TM),   electronic   signature,    biometric   signature   verification,
cryptography, electronic ink capture 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.

     For the six  months  ended  June  30,  2002,  the  Company's  cash and cash
equivalents  decreased  by $748 from  $2,588 at the  beginning  of the period to
$1,840.  The decrease was due primarily to cash used in operating  activities of
$978,  cash used in  investing  activities  of $12  offset by $242  provided  by
financing activities. The $242 provided by financing activities consists of $426
in proceeds from the exercise of stock  options by the  Company's  employees and
former  chairman,  reduced by the  repayment of the note by the Joint Venture of
$181 and by payments of capital  lease  obligations  of $3. As of June 30, 2002,
the  Company's  principal  source  of funds  was its  cash and cash  equivalents
aggregating  $1,840. The Company  anticipates that it will have adequate capital
to fund its planned  operations  for the near future.  However,  there can be no
assurance that the Company will have adequate capital resources to fund planned

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

operations  or that any  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 prospects.

     The financial  information  contained  herein 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, 2001.

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:
                                         June 30,              December 31,
                                           2002                    2001
                                  --------------------- -- -------------------

         Cash in bank                   $      1,114             $      1,621
         Commercial paper                         26                       26
         Money market                            700                      941
                                  ---------------------    -------------------
                                        $      1,840             $      2,588
                                  =====================    ===================

3.  Inventories
    -----------

          Inventories  are  stated at the lower of cost or  market,  cost  being
     determined using the first-in,  first-out (FIFO) method.  At June 30, 2002,
     inventories consisted primarily of finished goods.

4.  Short-term debt
    ---------------

          On August 23, 2001, the Company's 90% owned Joint Venture borrowed the
     aggregate  equivalent  of $181,  denominated  in Chinese  currency,  from a
     Chinese bank.  The loan bears interest at 5.37% per annum and is due August
     23,  2002.  The  borrowing  did not require the Joint  Venture to deposit a
     compensating  balance.  In February 2002, the Joint venture repaid $121 and
     in August 2002, paid the remaining equivalent of $60 denominated in Chinese
     currency.

5.  Related Party Transactions:
    --------------------------

       A. Long-term debt related party
        ------------------------------

          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.

          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
     June 30, 2002,  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


                                      -8-

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

     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.

      B. Transactions with PenOp
         -----------------------

          During the fourth quarter of 2000 the Company engaged in a transaction
     with PenOp to provide  nonrecurring  maintenance services from pre-existing
     PenOp  contracts in the aggregate  amount of $1.5  million,  of which a net
     amount of $877 was recorded as revenue during the quarter. At June 30, 2001
     the  Company  recognized  $325  of this  contract  revenue  net of  related
     expenses  of  $48.   The  Company   previously   entered  into  a  separate
     transaction, to acquire the intellectual property rights from PenOp.


6.  Revenue recognition
    -------------------

          Online Revenue - Revenue from retail product sales is recognized  upon
     sell through,  while  revenue from other  product sales is recognized  upon
     shipment provided that no significant obligations remain and the collection
     of the resulting receivable is probable. The Company provides for estimated
     sales returns at the time of shipment.

          Corporate  Revenue - License and product  revenues are recognized when
     the software has been delivered and when all significant  obligations  have
     been met in  accordance  with the American  Institute  of Certified  Public
     Accountants   Statement  of  Position   Number  97-2,   "Software   Revenue
     Recognition." The Company also follows the interpretive guidance of SAB 101
     issued by the  Securities  and Exchange  Commission and EITF issue 00-21 of
     the AICPA Emerging  Issues Task Force.  Royalty  revenues are recognized as
     products are licensed/sold by licensees.  Development  contracts revenue is
     generated primarily from non-recurring  engineering activities.  Revenue is
     recognized in accordance with the terms of the  agreements,  generally when
     collection is probable and related costs have been incurred.

          China Revenue - Revenue from system integration activities and product
     sales are recognized upon shipment provided that no significant obligations
     remain and the collection of the resulting receivable is probable.

7.  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
     and six months ended June 30, 2002,  and 2001 potential  equivalent  shares
     excluded  from the  calculation  of diluted  earnings  per share,  as their
     effect  is not  dilutive,  include  stock  options  of  6,682,  and  7,195,
     respectively, of equivalent shares and warrants of 470 equivalent shares at
     June 30, 2001.

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

8.     Comprehensive income

       Total comprehensive income (loss) was as follows:

                                                   Six Months Ended June 30,
                                               ---------- ------ -------------
                                                  2002                2001
                                               -----------       -------------

       Net loss                                $   (1,359)       $  (1,434)
       Other comprehensive income:
       Cumulative translation adjustment                2                2
                                               -----------       -------------
         Total comprehensive loss              $   (1,357)       $  (1,432)
                                               ===========       =============

9.  Segment Information
    -------------------

          The  Company's  segment  information  under the  Financial  Accounting
     Standards  Board  Statement  of  Financial  Accounting  Standards  No. 131,
     "Disclosures  About  Segments of An  Enterprise  and  Related  Information"
     ("SFAS  131"),  is  comprised  of two  segments -  handwriting  recognition
     software and systems integration.

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

          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 above represent sales to external customers.

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

                                   Six Months ended June 30,
                              2002                           2001
                    ----------------------------- ------------------------------
                    Handwriting Systems           Handwriting Systems
                    Recognition Integration Total Recognition Integration  Total
                    ----------- ----------- ----- ---------- ------------- -----

  Revenues              $ 1,711   $ 557   $ 2,268   $ 2,912   $ 609   $  3,521
  Loss from Operations  $(1,201)  $ (46)  $(1,247)  $(1,236)  $ (51)  $ (1,287)
  Significant change
   in   Total assets
   from Year End        $     -   $ (35)  $   (35)  $     -   $   -   $      -


                                      -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 I - Item 1 of this  Quarterly  Report on Form 10-Q and
"Management`s  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" set forth in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000.

     On October 6, 2000, CIC Acquisition Corp., a wholly-owned subsidiary of the
Company ("Acquisition Corp."),  acquired certain assets of PenOp Limited and its
subsidiary  PenOp Inc.  for 4.7  million  shares of common  stock of the Company
pursuant to an Asset Purchase Agreement,  dated as of September 29, 2000, by and
among  Acquisition  Corp.,  PenOp  Limited and PenOp Inc. At the closing of this
transaction,  Mr. Philip Sassower,  the Company's Chairman of the Board, and his
designees  agreed to purchase  from PenOp  Limited and PenOp Inc.,  in a private
transaction,  an aggregate of 1,713,728 shares of common stock received by PenOp
Limited and PenOp Inc. in connection with the Acquisition for $3,300.

Results of Operations

     Revenues.  For the three and six months ended June 30, 2002, total revenues
decreased $792 and $1,253, respectively, or 42% and 36%, respectively, to $1,111
and $2,268 from $1,903 and $3,521,  respectively,  for the comparable  three and
six month periods ended June 30, 2002 as discussed below:

                             Three Months Ended           Six Months Ended
                                  June 30,                     June 30,
                          ------------------------    ------------------------

                              2002        2001           2002          2001
                           ---------    --------      ----------    ----------

Revenues:
 Online                   $     80     $   307         $   204       $   635
 Corporate                     708       1,224           1,406         1,767
 Nonrecurring maintenance
  fees (net) - M10
  (previouslyPenOp)              -           -               -           352
 China                         323         372             658           767
                          --------      -------        --------      --------

       Total revenues      $ 1,111     $ 1,903         $ 2,268       $ 3,521
                          ========     ========        ========     ===========

     Online  revenues  decreased  $227 or 74% to $80 for the three  months ended
June 30, 2002 as compared to $307 in the prior year  period.  This  decrease was
primarily due to a decrease in available names used in the Company's direct mail
campaign  compared to the same period last year.  For the six months  ended June
30, 2002,  Online  revenues  decreased $431 or 68% to $204 from $635 in the same
six month period last year.  This decrease is due to the same factors  mentioned
above.

     Corporate sales, which includes Enterprise and OEM revenues,  decreased 42%
or $516 to $708 for the three  months  ended June 30, 2002 as compared to $1,224
in the prior year period. For the six months ended June 30, 2002 Corporate sales
decreased 20% or $361 to $1,406 from $1,767  compared to the six month period of
the prior year. Enterprise sales, included in Corporate sales, decreased for the
three months ended June 30, 2002, $280 or 38% to $463 as compared to $743 in the
prior year.  The decrease in  Enterprise  sales was primarily due to a sale to a
major  insurance  company  (Prudential  Insurance  Company  of  America)  in the
comparable prior year period.  For the six months ended June 30, 2002 Enterprise
sales increased 12% or $114 to $1,069 compared to $955 in the prior year period.
This  increase was  primarily  due to the increase in the number of sales of the
Company's  software  signature  products  over the six months as compared to the
prior year period.  OEM  revenues,  included in corporate  sales,  for the three
months ended June 30, 2002  decreased 49% or $236 to $245 from $481 in the prior
period.  This  decrease  was due to a  decrease  in the  amount of  royalty  and


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

development  contract revenues  recognized from OEMs compared to the prior year.
OEM  revenues for the six months  ended June 30, 2002  decreased  58% or $475 to
$337 from $812 in the prior  period.  The  decrease in OEM  revenues for the six
months ended June 30, 2002 was due  primarily to the same factors  discussed for
the current three month period.

     During the six months ended June 30, 2001, the Company  recognized  $352 in
nonrecurring  maintenance  fees net of expenses of $48. The Company engaged in a
transaction  with  PenOp  to  provide  nonrecurring  maintenance  services  from
pre-existing  PenOp contracts in the aggregate amount of $1.5 million,  of which
$877 was recorded (net) in the fourth  quarter of 2000.  The Company  previously
entered into a separate transaction to acquire the intellectual  property rights
from PenOp.  No such  nonrecurring  maintenance  service  revenues were recorded
during the six months ended June 30, 2002.

     China sales for the three months ended June 30, 2002  decreased $49 to $323
from $372 in the same prior year period.  For the six months ended June 30, 2002
China  revenues  decreased  14% or $109 to $658 from $767 in the same prior year
period.  This  decrease  was due to  decreased  overall  sales  activity in 2002
compared to the prior year period.

     Cost of Sales.  Total cost of sales  decreased for the three and six months
ended June 30, 2002 $399 and $580,  respectively,  or 57% and 44%, respectively,
to $303 and $744, respectively compared to $702 and $1,324, respectively, in the
same prior year periods.

     Online  cost of sales for the  three and six  months  ended  June 30,  2002
decreased $284 and $390, respectively,  or 93% and 68%, respectively, to $22 and
$185, respectively,  compared to $306 and $575, respectively,  in the same prior
year  periods.  This  decrease  was due to the  elimination  of direct  mail and
associated costs brought about by the decreased number of names available during
the three and six months ended June 30, 2002.

     Corporate  sales costs for the three months  ended June 30, 2002  decreased
$81 or 52% to $76 from $157 in the same  prior year  period.  For the six months
ended  June  30,  2002,  corporate  cost of sales  decreased  $99 or 42% to $133
compared  to $232 in the  same  prior  year  period.  Enterprise  cost of  sales
decreased  $64 or 44% to $80 for the three  months ended June 30, 2002 from $144
in the  comparable  prior year  period.  The  decrease was due to a reduction in
third party hardware costs sold with the Company's  corporate signature software
solution products,  and amortization of capitalized  software costs. For the six
months ended June 30, 2002,  enterprise cost of sales increased $7 or 5% to $137
compared to $130 in the  comparable  prior year period.  The increase was due to
sales  requiring third party hardware  devices.  OEM and licensing costs for the
three  and six  month  periods  ended  June 30,  2002  decreased  $17 and  $105,
respectively,  or 130% and 103%,  respectively,  to $(4) and $(3), respectively,
from $13 and $102, respectively, in the prior year periods. The decrease was due
to a decrease  in revenues  and the  associated  technology  import tax from the
Company's Japanese OEM customers.

     China  cost of sales for the  three  and six  months  ended  June 30,  2002
decreased  $34  and  $91,  respectively,  or 14%  and  18%  to  $205  and  $426,
respectively,  compared to $239 and $517,  respectively,  in the same prior year
periods.  The decrease was due to a reduction in system  integration sales which
require  third party  hardware  and an increase  in higher  margin  sales of the
Company's  software  products  over the three and six month  ended June 30, 2002
compared to the same prior year periods.

     Gross Margin. Gross margin for the three and six months ended June 30, 2002
decreased $393 and $673, respectively, or 33% and 31%, respectively, to $808 and
$1,524, respectively,  from $1,201 and $2,197,  respectively,  in the same prior
year periods.

     Online gross margin for the three months ended June 30, 2002  increased $57
to $58 from a gross  margin of $1 for same prior year period.  This  increase is
due to the elimination of direct mail and associated  costs brought about by the
decreased number of names available during the three months ended June 30, 2002.
For the six month period ended June 30, 2002, Online gross margins decreased $41
to $19 from $60 for the six months  ended June 30,  2002  compared  to the prior

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

year.  The  decrease  was due to fewer  new names  available  over the six month
period  ended June 30, 2002  compared to the same six month period last year and
the direct  mail costs  incurred in the attempt to  stimulate  sales  during the
first  quarter  of the  current  year.  Online  gross  margins  were 73% and 9%,
respectively, of sales for the three and six months ended June 30, 2002 compared
to less than 1% and 9%, respectively, in the same prior year periods.

     Corporate  sales gross  margin for the three and six months  ended June 30,
2002 decreased $435 and $262,  respectively,  or 41% and 17%,  respectively,  to
$632 and $1,273, respectively,  compared to $1,067 and $1,535, respectively,  in
the same prior year periods.  This decrease was primarily due to the decrease in
Corporate  sales.  Corporate sales gross margin as a percentage of sales was 89%
and 91% for the three and six month  periods ended June 30, 2002 compared to 87%
and 87% for the same three and six month periods of the prior year.

     China sales gross margin for the three and six month periods ended June 30,
2002 decreased $15 and $18, respectively,  or 11% and 7%, respectively,  to $118
and $232, respectively, from $133 and $250, respectively, in the same prior year
periods. This increase was due to the increase in sales, and change in the sales
mix from system  integration sales to software product sales. China gross margin
as a percentage  of sales  increased to 37% and 35% for the three and six months
ended June 30, 2001 compared to 36% and 33%,  respectively,  for the  comparable
three and six month periods in the prior year periods.

     Research and development  expenses.  Research and development  expenses for
the  three  and six  months  ended  June 30,  2002  decreased  by $128 and $193,
respectively,  to $366 and $778,  respectively,  as  compared  to $494 and $971,
respectively,  in the comparable  three and six month periods of the prior year.
The decrease was due primarily to the reduction of  approximately  $81 and $212,
respectively,  in outside  engineering costs associated with the assimilation of
the PenOp  intellectual  property  into the  Company's  products.  In  addition,
payroll and related costs decreased approximately $23 and $65, respectively, for
the three and six months  ended June 30, 2002,  compared to the prior year.  The
reduction in payroll and related expenses was due to actions taken in the fourth
quarter of last year to trim expenses in response to a weakening economy.  Other
costs including  facilities and shared  engineering costs with the Joint Venture
decreased $1 for the three months ended June 30, 2002 compared to the prior year
and increased $44 over the six months ended June 30, 2002. The increase over the
six month period was due to increases in facility expenses. Expenses transferred
to cost of sales increased $23 for the three months ended June 30,2002  compared
to the prior  year  period.  Expenses  transferred  to cost of sales for the six
months  ended June 30 2002  decreased  $40  compared  to the prior  year.  These
fluctuations  in  expenses  for the three and six month  periods  are due to the
changes in the number of revenue  generating NRE projects being worked on during
a given  period.  The  Company  capitalized  $20 in software  development  costs
associated with new products and  enhancements  during the six months ended June
30, 2001. The Company did not capitalize  any new product  software  development
costs in the six month period ending June 30, 2002.

     Sales and marketing  expenses.  Sales and marketing  expenses for the three
and six months ended June 30, 2002  decreased  $146 and $320,  respectively,  to
$427 and $814, respectively,  as compared to $573 and $1,134,  respectively,  in
the comparable periods of the prior year.  Professional services and advertising
expenses  decreased $18 to $82 from $100 for the three month ended June 30, 2002
as compared with the same period last year.  For the six month period ended June
30, 2002,  professional services and advertising fees decreased $77 to $107 from
$184 as compared with the same period last year. This decrease was due primarily
to the reduction in the volume of resource guide advertisements  included in the
box that accompany the hand held devices.  Other costs,  including  salaries and
related  expenses and travel and  recruiting  expenses,  decreased  $128 for the
three months ended June 30, 2001  compared to the same period in the prior year.
For the six months  ended June 30,  2001 other  costs,  including  salaries  and
related expenses and travel and recruiting  expenses  decreased $243 as compared
to the same six month period last year.  The reduction in other expenses was due
to actions taken in the fourth quarter of last year to trim expenses in response
to a weakening economy.

     General and administrative  expenses.  General and administrative  expenses
for the three and six months ended June 30, 2002  decreased $97 and $200 to $639
and $1,179, respectively,  from $736 and $1,379, respectively, in the comparable
period  of the  prior  year.  Professional  services  decreased  $103 and  $179,
respectively,  due to the reduction in legal fees and in financial  service fees
paid

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

to the former  Chairman of the  Company.  Payroll and  related  costs  increased
approximately  $14 and $20 respectively,  due to salary increases.  Other costs,
including facilities and related costs, decreased $8 and $41, respectively, over
the  comparable  three and six month periods of the prior year.  The decrease in
expenses  discussed  above were due  primarily  to a decrease  in  expenses as a
result of actions  taken in the fourth  quarter of last year to trim expenses in
response to a weakening economy.

     Interest  and other  income  (expense),  net.  Interest  and  other  income
(expense), net for the three and six months ended June 30, 2002 decreased $5 and
$23, respectively, to income of $4 and an expense of $9, respectively,  compared
to income of $9 and $14,  respectively,  in the comparable  periods of the prior
year.  Interest  income  from cash and cash  equivalents  decreased  $9 and $25,
respectively,  to $7 and $8 for the three and six months  ended  June 30,  2002,
compared to $16 and $33 in the same periods of the prior year. This decrease was
due to lower cash balances and declining interest rates during the three and six
month  periods  ended June 30, 2001  compared to the prior  year.  The  interest
income was offset by $3 and $12,  respectively,  of credit card  processing  and
other fees compared to $7 and $21, respectively, in the same period of the prior
year related to Online sales.

     Interest expense. Interest expense decreased $48 and $57, respectively,  to
$50 and $102 for the three and six month periods ended June 30, 2002 compared to
$98 and $159,  respectively,  in the same prior year  periods.  The  decrease in
interest  expense  was  primarily  due to the  decrease  in  the  loan  discount
amortization  of $51 and $68 for the three and six months  ended  June 30,  2002
compared to the prior year.  This  decrease was offset by an increase $3 and $11
for the three and six months  ended June 30,  2002.  The  increase  in  interest
expense  was due to an  increase  in  long-term  debt in June of 2001.  The loan
discount  amortization  was fully  expensed as of June 30, 2001 when the Company
refinanced $1,500 in long term debt.


Liquidity and Capital Resources

     At June 30, 2002, cash and cash equivalents totaled $1,840 compared to cash
and cash  equivalents  of $2,588 at December  31,  2001.  The  decrease  was due
primarily to cash used in operating  activities of $978,  cash used in investing
activities of $12. Cash provided by financing activities was $242, net. The $242
provided by financing activities consists primarily of proceeds of $426 from the
exercise of stock options by the Company's employees reduced by the repayment of
notes by the Joint Venture of $181 and by payments on capital lease  obligations
of $3. Total  current  assets were $3,286 at June 30, 2002 compared to $3,899 at
December 31, 2001.

     As of June 30, 2002,  the Company's  principal  source of liquidity was its
cash and cash  equivalents  of $1,840.  Although  there can be no  assurance  of
continued  sufficiency,  the Company believes that its cash and cash equivalents
together with cash provided from projected cash inflows will be adequate to fund
planned  operations  for the near future.  However,  if the Company is unable to
generate adequate cash flows from sales, or if expenditures  required to achieve
the Company's  plans are greater than  expected,  the Company may need to obtain
additional  funds or reduce  discretionary  spending.  There can be no assurance
that additional  funds will be available when needed,  or if available,  will be
available  on  favorable  terms or in the amounts  required by the  Company.  If
adequate  funds are not  available  when needed,  the Company may be required to
delay, scale back or eliminate some or all of its operations,  which will have a
material  adverse  effect on the Company's  business,  results of operations and
prospects.

     Current liabilities,  which include deferred revenue, were $891 at June 30,
2002.  Deferred  revenue,  totaling  $112 at June 30, 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.

     The Company  currently  owns 90% of a joint  venture  with the  Information
Industry  Bureau of the Jiangsu  Province,  a provincial  agency of the People's
Republic of China (the "Agency").  The Company's investment in the Joint Venture
is subject to risks of doing  business  abroad,  including  fluctuations  in the
value  of  currencies,   export  duties,  import  controls  and  trade  barriers
(including  quotas),  restrictions  on the  transfer  of funds,  longer  payment
cycles,  greater  difficulty  in  accounts  receivable  collections,  burdens of
complying with foreign laws and political and economic instability.

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

     On  October  2, 2001 the  Company  entered  a new five  year  lease for its
existing  principal  offices at 275 Shoreline  Drive,  Suite 500, Redwood Shores
California for approximately  9,634 square feet. The lease commenced November 1,
2001 with a first year lease costs of  approximately  $347,000.  The cost of the
lease will increase  approximately 3% per annum over the term of the lease which
expires  October 31,  2006.  In addition to the base rent the Company will pay a
percentage of the increase,  if any, in operating  cost incurred by the landlord
in such year over the  operating  expenses  incurred by the landlord in the base
year.  The Company  believes the offices will be adequate for its needs over the
term of the lease.

     On August 23, 2001,  the  Company's  90% owned Joint  Venture  borrowed the
aggregate  equivalent of $181,  denominated in Chinese currency,  from a Chinese
bank. The loan bears interest at 5.37% per annum and is due August 23, 2002. The
borrowing did not require the Joint Venture to deposit a  compensating  balance.
In  February  2002,  the Joint  Venture  repaid $121 and in June 2002 repaid the
remaining balance of $60 denominated in Chinese currency.

     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.  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 June 30,  2002,  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.


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;

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

Forward Looking Statements (continued)

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 June 30, 2001.

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.

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
their stock  broker,  thereby  delaying  the sale of  plaintiffs'  shares in the
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
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.

                                      -16-
<PAGE>

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

Item 2.  Change in Securities

     During the three  months  ended June 30, 2002,  the Company  granted  stock
options to employees and directors as follows:

  ------------------------------------------------------------------------------
                     Grant     Number of   Option      Vesting       Expiration
  Grantees           Date       Options     Price      Period           Date
  ------------------------------------------------------------------------------

   3 Directors  June 24, 2002    75,000      $0.66   Immediately   June 24, 2009
  ------------------------------------------------------------------------------
  ------------------------------------------------------------------------------

                                                                  Quarterly over
   1 Employees  June 12, 2002   100,000      $0.75   three years   June 12, 2009

   2 Employees  June 12, 2002    8,000       $0.75   Immediately   June 12, 2009
  ------------------------------------------------------------------------------

Item 3.  Defaults Upon Senior Securities

         None

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

     The Company held its Annual Meeting of  Stockholders  on June 24, 2002. The
number of shares  of common  stock  with  voting  rights as of the  record  date
represented at the meeting either in person or by proxy was 85,138 shares or 93%
of the eligible  outstanding  Common Stock of the Company.  Three proposals were
voted upon by the stockholders. The proposals and the voting results follow:

Proposal 1

     Each of the four  persons  listed  below were elected as directors to serve
until the next Annual  Meeting or until his  successor is elected or  appointed.
The number of votes for and withheld for each  individual  is listed next to his
name.

                                                               Broker
                                                   -----------------------------
   Name                  For         Withheld      Non-votes         Abstain
  ----------------- -----------  --------------- ---------------  --------------

   Guido DiGregorio    84,182              956           None              None
   Michael Farese      84,459              679           None              None
   Louis Panetta       84,459              679           None              None
   C. B. Sung          84,459              679           None              None

Proposal 2

     To ratify the  appointment  of Stonefield  Josephson,  Inc. as  independent
accountants  of the Company for the fiscal year ending  December 31,  2002.  The
number of votes for, against and abstaining on this proposal was as follows:

                                                              Broker
                                                     --------------------------
                  For        Against       Abstain      Non-votes      Abstain
               ---------   -----------   -----------  -------------  ----------


All Classes      84,515        488          135           None           None


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

Proposal 3

     To ratify the amendment to the Company's 1999 Stock Option Plan  increasing
the number of shares of the Company's common stock available for grants of stock
options under the plan. The number of votes for,  against and abstaining on this
proposal was as follows:

                                                                 Broker
                                                       ------------------------
                   For         Against      Abstain      Non-votes     Abstain
                 --------    ----------   -----------  ------------- ----------


All Classes       80,588        4,228         321         None           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

         None


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

                                   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



    August 14, 2001                       /s/  Francis V. Dane
-----------------------         ---------------------------------------------
          Date                                 Francis V. Dane
                                (Principal Financial Officer and Officer Duly
                                Authorized to Sign on Behalf of the Registrant)


                                      -19-
<PAGE>