CombiMatrix Corporation Reports Results for 2013 First Quarter

CombiMatrix Corporation Reports Results for 2013 First Quarter

Core Prenatal Testing Revenues Grew 158% Year-Over-Year in First Quarter

IRVINE, Calif., May 8, 2013 (GLOBE NEWSWIRE) -- CombiMatrix Corporation
(Nasdaq:CBMX), a molecular diagnostics company performing DNA-based testing
services for developmental disorders and cancer, reported today that total
revenues for the first quarter 2013, increased to $1.6 million, up 27% from
the first quarter 2012. Revenues from the Company's core prenatal testing
markets in the first quarter grew by 158% over the corresponding period in
2012. On a sequential basis, prenatal testing revenues in the 2013 first
quarter grew by 21% over the 2012 fourth quarter, while total revenues grew
11% over the same period.

As previously reported, the first quarter revenue growth in prenatal testing
was driven by a 124% increase in billable test volumes. Revenue growth
outpaced test volume growth in that category due to a stronger product mix
toward microarrays and a stabilizing reimbursement mix among third-party
payors. The Company performed a total of 1,718 billable diagnostic tests for
119 customers in the first quarter of 2013, compared to 1,377 tests for 105
customers in the first quarter of 2012.

In 2012, the Company announced that it would direct resources to build on its
advantageous position and success in the prenatal markets, while in oncology,
it would focus almost exclusively on laboratory partnerships and de-emphasize
direct oncology efforts.Prenatal testing revenues in the first quarter 2013
were $959,000, as compared to $372,000 in the comparable 2012 period.

CombiMatrix Corporation's President and Chief Executive Officer Mark McDonough
said, "In the first quarter, we continued to execute in the field and exceed
internal plans across developmental testing, especially in our core prenatal
business.That business was again driven principally by miscarriage management
testing, where we see a wide open opportunity. Prenatal microarray testing
volumes are also increasing as physicians are recognizing the clinical
benefits highlighted in recent high-profile studies."

Total operating expenses in the 2013 first quarter were $3.2 million, a
reduction of 12% from the prior year first quarter total operating expenses of
$3.6 million. The reduction was primarily due to the Company's cost-cutting
activities and organizational shift in mid-2012 to focus resources more fully
on its core prenatal markets.

"While we have made the Company leaner and more efficient than it was a year
ago, the commercial momentum we have established remains strong, and we are
executing a number of new programs to make sure those trends continue," added
McDonough. "Those initiatives include placing new sales personnel in key
markets where payback will be rapid, initiating and fostering partnerships
with laboratories that do not have our microarray expertise or facilities and
working to secure additional strategic corporate relationships that could
drive significant growth well into the future."

Net loss during the first quarter of 2013, including substantial non-cash
warrant derivative gains, was $(48,000), or $(0.02) per basic and diluted
share, compared to $(2.4 million), or $(2.21) per basic and diluted share in
the first quarter of 2012.The decrease in net loss was partially due to
higher revenues and lower operating expenses previously discussed, but was
primarily driven by a non-cash, warrant derivative gain of $1.8 million that
was recognized during the first quarter of 2013.Under generally accepted
accounting principles, warrants that were issued as part of the Company's
Series A convertible preferred stock financing in the fourth quarter of 2012
are classified as derivative liabilities at fair value, with changes to fair
value recognized as non-operating gains or charges in the consolidated
statements of operations.Primarily as a result of certain warrant exercises
during the first quarter of 2013, the value of the derivative warrant
liabilities decreased by $1.8 million, resulting in a corresponding gain to
the 2013 consolidated statement of operations.

Cash and cash equivalents totaled $3.4 million as of March 31, 2013 vs. $2.4
million as of December 31, 2012.Cash used in operating activities was $(1.60
million) for the three months ended March 31, 2013, compared to $(1.63
million) for comparable period in 2012. The Company completed financing
activities in the first quarter including a registered direct offering for the
sale of Series B convertible preferred stock, common stock and warrants to an
existing institutional investor that resulted in gross proceeds to the Company
of $2.0 million.In addition, the exercise of certain warrants to purchase
common stock from the Company's Series A convertible preferred stock financing
executed in the fourth quarter of 2012 resulted in additional proceeds of
$993,000 through March 31, 2013, and additional proceeds of $402,000 in April
of 2013. Finally, as previously reported, the Company executed a Series C
convertible preferred stock financing with institutional investors that
provided $1.2 million of gross cash proceeds at closing of the first tranche
on May 6, 2013 and, pending stockholder approval at the Company's upcoming
annual shareholders' meeting on June 27, 2013, will provide an additional $1.2
million of gross proceeds upon closing of the 2^nd tranche.

Conference Call

CombiMatrix will host a conference call at 8:00 a.m. Pacific Time (11:00 a.m.
Eastern) today to discuss the first quarter 2013 financial results.To attend
the presentation by phone, dial 1-888-438-5491 for domestic callers and
1-719-457-2085 for direct-dial or international callers. To listen to the call
via CombiMatrix's website, go to www.combimatrix.com in the Investor/Events
section (http://investor.combimatrix.com/events.cfm). A replay of the
presentation will be available following the presentation, either via the
CombiMatrix website Investor/Events section
(http://investor.combimatrix.com/events.cfm) or by dialing 1-877-870-5176 for
domestic callers or 1-858-384-5517 for direct-dial international callers. When
prompted, enter playback pin number 6725021.

About CombiMatrix Corporation

CombiMatrix Corporation, through its wholly owned subsidiary, CombiMatrix
Molecular Diagnostics, Inc. (CMDX), is a molecular diagnostics laboratory
which offers DNA-based testing services in the areas of POC (products of
conception), prenatal, pediatric and oncology.The Company performs genetic
testing utilizing Microarray, FISH, PCR and G-Band chromosome analysis.CMDX
offers prenatal and pediatric testing services for the detection of
abnormalities of genes at the DNA level beyond what can be identified through
traditional technologies.Additional information about CMDX is available at
www.cmdiagnostics.com or by calling 1-800-710-0624.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995

This press release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995.These statements are based upon our current expectations, speak only
as of the date hereof and are subject to change.All statements, other than
statements of historical fact included in this press release, are
forward-looking statements.Forward-looking statements can often be identified
by words such as "anticipates," "expects," "intends," "plans," "goal,"
"predicts," "believes," "seeks," "estimates," "may," "will," "should,"
"would," "could," "potential," "continue," "ongoing," similar expressions, and
variations or negatives of these words and include, but are not limited to,
statements regarding projected results of operations and management's future
business, operational and strategic plans, test menu expansion, services and
reports development and attracting greater prenatal genetic screening
business.These forward-looking statements are not guarantees of future
results and are subject to risks, uncertainties and assumptions that could
cause our actual results to differ materially and adversely from those
expressed in any forward-looking statement.The risks and uncertainties
referred to above include, but are not limited to:our ability to successfully
expand the base of our customers and strategic partners, add to the menu of
our diagnostic tests in both of our primary markets, develop and introduce new
tests and related reports, optimize the reimbursements received for our
testing services, and increase operating margins by improving overall
productivity and expanding sales volumes; our ability to successfully
accelerate sales, steadily increase the size of our customer rosters in both
prenatal and developmental genetic testing markets; our ability to attract and
retain a qualified sales force; rapid technological change in our markets;
changes in demand for our future products; legislative, regulatory and
competitive developments; general economic conditions; and various other
factors.Further information on potential factors that could affect our
financial results is included in our Annual Report on Form 10-K, Quarterly
Reports of Form 10-Q, and in other filings with the Securities and Exchange
Commission.We undertake no obligation to revise or update publicly any
forward-looking statements for any reason, except as required by law.

COMBIMATRIX CORPORATION
CONSOLIDATED SUMMARY FINANCIAL INFORMATION
(In thousands, except share and per share information)
(Unaudited)
                                                           
CONSOLIDATED STATEMENTS OF OPERATIONS:
                                                           
                                                 Three Months Ended
                                                 March 31,
                                                 2013       2012
Revenues:                                                   
Diagnostic services                               $1,586   $1,244
Royalties                                         25        25
Total revenues                                    1,611     1,269
                                                           
Operating expenses:                                         
Cost of services                                  937       659
Research and development                          183       450
Sales and marketing                               641       873
General and administrative                        1,373     1,574
Patent amortization and royalties                 60        76
Total operating expenses                          3,194     3,632
Operating loss                                    (1,583)   (2,363)
                                                           
Other income (expense):                                     
Interest income                                   --       1
Interest expense                                  (302)     (6)
Warrant derivative gain                           1,837     --
Total other income (expense)                      1,535     (5)
Net income (loss)                                 $(48)    $(2,368)
                                                           
Deemed dividends from issuing Series B                      
convertible preferred stock                       (417)     --
Series A convertible preferred stock dividends    (246)     --
Net loss attributable to common stockholders      $(711)   $(2,368)
                                                           
Basic and diluted net income (loss) per share     $(0.02)  $(2.21)
Deemed dividends from issuing Series B                      
convertible preferred stock                       (0.18)    --
Series A convertible preferred stock dividends    (0.11)    --
Basic and diluted net loss per share attributable           
to common stockholders                            $(0.31)  $(2.21)
                                                           
Basic and diluted weighted average                          
common shares outstanding                         2,314,786 1,070,384
                                                           

CONSOLIDATED BALANCE SHEET INFORMATION:           
                                                 
                                       March 31, December 31,
                                       2013       2012
                                                 
Total cash and cash equivalents         $3,405     $2,372
Total assets                            $6,405     $5,180
Total liabilities                       $4,322     $5,905
Total stockholders' equity (deficit)    $2,083     $(1,119)

CONTACT: Company Contact:
         Mark McDonough
         President & CEO, CombiMatrix Corporation
         Tel (949) 753-0624
        
         Investor Relations Contact:
         John Baldissera
         BPC Financial Marketing
         Tel (800) 368-1217
        
         Media Contact:
         Len Hall
         VP, Media Relations
         Allen & Caron
         Tel (949) 474-4300
         len@allencaron.com

CombiMatrix Corporation
 
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