CombiMatrix Corporation Reports Record Microarray Volumes for 2013 Second Quarter

CombiMatrix Corporation Reports Record Microarray Volumes for 2013 Second
Quarter

Prenatal Microarray Testing Volumes Grew 156% in Second Quarter; Record Cash
Reimbursement; Company Expects to Regain Compliance With Nasdaq Stockholders'
Equity Requirement

IRVINE, Calif., Aug. 7, 2013 (GLOBE NEWSWIRE) -- CombiMatrix Corporation
(Nasdaq:CBMX), a molecular diagnostics company specializing in DNA-based
testing services for developmental disorders and cancer diagnostics, reported
today that total revenues for the second quarter and first six months of 2013
increased to $1.5 million and $3.1 million, respectively, up 15 percent and 21
percent from the second quarter and first six months of 2012, respectively.
Revenues from the Company's core prenatal microarray testing markets grew by
152 percent in the second quarter of 2013 over the corresponding period in
2012, and by 159 percent year-over-year for the first six months. Prenatal
microarray volumes grew by 156 percent and 171 percent in the same periods,
respectively. The Company performed a total of 1,485 billable diagnostic tests
for 125 customers in the second quarter of 2013, compared to 1,459 tests for
116 customers in the second quarter of 2012.

Last year, the Company announced that it would direct resources to build on
its advantageous position and success in the prenatal and pediatric markets,
while in oncology, it would focus almost exclusively on laboratory
partnerships and de-emphasize direct oncology efforts. In addition, the
Company has announced that technology advancements and the continued
acceptance of microarray testing as an emerging standard would allow the
Company to eliminate focus on older testing technologies to focus on
microarray testing. Prenatal microarray testing revenues in the second quarter
and first half of 2013 were $836,000 and $1.7 million, respectively, as
compared to $331,000 and $645,000 in the 2012 periods.

CombiMatrix President and Chief Executive Officer Mark McDonough said, "We
believe the quality of our testing platform and the service commitment of our
organization are making it possible to succeed on multiple commercial fronts.
Growth in our microarray volumes, positive coverage decisions at multiple
third-party payors and the recently announced partnership with Sequenom
provides evidence of that progress. In addition, we are driving the fastest
growth in the most important and highest margin segment of our business –
prenatal microarray testing."

"We intend to become the premier independent laboratory focusing on delivering
microarray technologies," continued McDonough. "As we continue to secure
partners in the marketplace that recognize the value and flexibility we
provide in offering microarray services, we will also continue to build out
our commercial team to take advantage of broadening geographies and the
dynamic caused by all of the recent positive clinical trial data supporting
microarray testing."

Total operating expenses were $3.0 million and $6.2 million for the second
quarter and first six months of 2013, representing reductions of 9% and 10%
from the comparable prior periods' total operating expenses of $3.3 million
and $7.0 million, respectively. The reductions were 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. CombiMatrix CFO Scott
Burell said, "We have successfully controlled costs and reduced our need for
cash in recent quarters. That discipline, combined with record cash
reimbursement levels, the recent financing activities and common stock warrant
exercises, have provided us with the highest cash balance we have had in more
than 6 quarters."

Net loss was $(121,000), or $(0.03) per basic and diluted share, in the second
quarter of 2013, compared to $(2.0 million), or $(1.90) per basic and diluted
share, in the second quarter of 2012. Net loss was $(169,000), or $(0.06) per
basic and diluted share, in the first six months of 2013, compared to $(4.4
million), or $(4.11) per basic and diluted share, in the first six months of
2012. The decrease in net loss for all periods presented was partially due to
higher revenues and lower operating expenses previously discussed, but was
primarily driven by non-cash, warrant derivative gains of $1.4 million and
$3.3 million for the three and six months ended June 30, 2013, respectively.
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 at each balance sheet date. Primarily as
a result of certain warrant exercises during the first and second quarters of
2013, the value of the derivative warrant liabilities has decreased by a
combined $3.3 million since December 31, 2012, resulting in corresponding
gains to the 2013 consolidated statements of operations.

Net loss attributable to common shareholders for the three and six months
ended June 30, 2013 was $(1.3 million), or $(0.37) per basic and diluted
share, and $(2.1 million), or $(0.69) per basic and diluted share,
respectively. Net loss attributable to common shareholders includes deemed
dividends from the issuance of Series B and C convertible preferred stock of
$417,000 and $1.2 million, respectively, in the first six months of 2013.

Cash and cash equivalents totaled $5.7 million as of June 30, 2013 compared to
$2.4 million as of December 31, 2012.Cash used in operating activities was
$(1.2 million), $(2.8 million), $(1.5 million) and $(3.1 million) for the
three and six months ended June 30, 2013 and 2012, respectively, and is lower
for all periods presented due to higher revenues and cost-containment efforts
discussed above.The Company achieved the highest quarterly cash
reimbursements in its history of $1.5 million in the 2013 second quarter,
despite industry-wide shifts in reimbursement codes.

As previously reported, the Company completed a Series C convertible preferred
stock financing in two tranches during the 2013 second quarter, which resulted
in gross proceeds of $2.4 million.In addition, proceeds from the exercise of
certain common stock warrants provided an additional $1.4 million of cash
proceeds during the 2013 second quarter.Combined with first quarter financing
activities, the Company has received cash proceeds from Series B and C
financings and warrant exercises of $6.4 million, net of offering-related
costs paid through June 30, 2013.Management believes that it now has
sufficient cash resources to last into the third quarter of 2014.In addition,
by achieving $5.7 million of stockholders' equity as of June 30, 2013, the
Company believes it satisfies the Nasdaq listing requirement for minimum
stockholders' equity and expects to regain compliance with this listing
requirement after filing its Quarterly Report on Form 10-Q with the Securities
and Exchange Commission.There can be no assurance, however, that the Company
will be able to maintain compliance with such listing requirement in the
future.On July 22, 2013, as a result of the appointment of Robert Hoffman to
the Company's Board of Directors, Nasdaq notified the Company that it had
regained compliance with the requirement to have a majority of independent
directors.

Conference Call

CombiMatrix will host a conference call at 8:00 a.m. Pacific Time (11:00 a.m.
Eastern) today to discuss the second quarter 2013 financial results.To attend
the presentation by phone, dial 1-888-364-3108 for domestic callers and
1-719-325-2452 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 6677286.

About CombiMatrix Corporation

CombiMatrix Corporation provides valuable molecular diagnostic solutions and
comprehensive clinical support for the highest quality of care.CombiMatrix
specializes in miscarriage analysis, prenatal and pediatric healthcare,
offering DNA-based testing for the detection of genetic abnormalities beyond
what can be identified through traditional methodologies.CombiMatrix performs
genetic testing utilizing a variety of advanced cytogenomic techniques,
including microarray, standardized and customized FISH, and high resolution
karyotyping. Additional information about CombiMatrix is available at
www.combimatrix.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, the ability to regain compliance
with Nasdaq listing requirements, 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 microarray
testing services, and increase operating margins by improving overall
productivity and expanding sales volumes; the possibility that Nasdaq will
determine that the we have not regained compliance with the stockholders'
equity listing requirement due to perceived long-term factors; 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 in wider geographies;
rapid technological change in our markets; changes in demand for our future
services; 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)
                                                                
                                  Three Months Ended    Six Months Ended
                                  June 30,              June 30,
                                  2013       2012       2013       2012
                                                                
Revenues                                                         
Diagnostic services                $1,445   $1,252   $3,031   $2,496
Royalties                          55        54        80        79
Total revenues                     1,500     1,306     3,111     2,575
                                                                
Operating expenses:                                              
Cost ofservices                   851       677       1,788     1,336
Research and development           177       342       360       792
Sales and marketing                695       679       1,336     1,552
General and administrative         1,251     1,569     2,624     3,143
Patent amortization and royalties  66        66        126       142
Total operating expenses           3,040     3,333     6,234     6,965
Operating loss                     (1,540)   (2,027)   (3,123)   (4,390)
Other income (expense):                                          
Interest income                    1         --        1         1
Interest expense                   (19)      (6)       (321)     (12)
Warrant derivative gains           1,437     --        3,274     --
Total other income (expense)       1,419     (6)       2,954     (11)
Net loss                           $(121)   $(2,033) $(169)   $(4,401)
                                                                
Series A convertible preferred     $--      $--      $(246)   $--
stock dividends
Series C convertible preferred     (11)      --        (11)      --
stock dividends
Deemed dividends from issuing
Series B convertible preferred     --        --        (417)     --
stock
Deemed dividends from issuing
Series C convertible preferred     (1,213)   --        (1,213)   --
stock
Net loss attributable to common    $(1,345) $(2,033) $(2,056) $(4,401)
stockholders
                                                                
Basic and diluted net income       $(0.03)  $(1.90)  $(0.06)  $(4.11)
(loss) per share
Series A convertible preferred     --        --        (0.08)    --
stock dividends
Deemed dividends from issuing
Series B convertible preferred     --        --        (0.14)    --
stock
Deemed dividends from issuing
Series C convertible preferred     (0.34)    --        (0.41)    --
stock
Basic and diluted net loss per
share attributable to common       $(0.37)  $(1.90)  $(0.69)  $(4.11)
stockholders
                                                                
Basic and diluted weighted average 3,547,709 1,070,384 2,934,653 1,070,384
common shares outstanding

                                                
CONSOLIDATED BALANCE SHEET INFORMATION:          
                                                
                                       June 30, December 31,
                                       2013      2012
                                                
Total cash and cash equivalents         $5,724    $2,372
Total assets                            $8,603    $5,180
Total liabilities                       $2,934    $5,905
Total stockholders' equity              $5,669    $ (1,119)

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

CombiMatrix Corporation