MUKILTEO, Wash., July 11, 2008 (PRIME NEWSWIRE) -- CombiMatrix Corporation (NasdaqGM:CBMX - News) announced today that it has sold a $10 million secured convertible note to a single institutional investor. The note is due on the earlier of July 10, 2010 or within four months after payment from National Union Fire Insurance Company (an AIG company, (NYSE:AIG - News)) in accordance with the $35.7 million judgment issued by the United States District Court for the Central District of California. National Union has appealed the judgment. The note bears annual interest of 10% and is convertible into common stock of CombiMatrix Corporation at any time at a conversion price of $11.87 per share, which is equivalent to 842,460 shares of the Company's common stock. Interest payments are to be made quarterly beginning October 2008. The note is secured by the judgment as well as other assets of the Company. CombiMatrix also has the right to force conversion of the note upon meeting certain trading conditions. In addition to the note, CombiMatrix issued a warrant to purchase 168,492 shares of common stock at an exercise price of $11.87, and a warrant to purchase 168,492 shares of common stock at an exercise price of $13.65. The term of both warrants is five years, and CombiMatrix has the right to call the warrants upon meeting certain trading conditions.

There was no underwriter or broker involved in this transaction. After covering certain issuance costs, the net proceeds to CombiMatrix were approximately $9.8 million, which will be used for working capital needs including expansion of the Company's rapidly growing molecular diagnostics business.

As a condition to the financing, all executive officers of CombiMatrix, including the CEO and board of directors, have signed lock-up agreements that prohibit selling of their current or future holdings (except selling for tax reasons, under certain conditions) until one-half of the principal amount of the note has been converted or redeemed.

``We are pleased to have completed this financing in the form of a convertible note, under very difficult market conditions. Though we can never predict a final outcome or timing, we hope this capital will bridge us to collection of the above noted judgment against National Union. Meanwhile, we will continue to build our promising diagnostics and genetic analysis business,'' stated Dr. Amit Kumar, President and CEO of CombiMatrix Corporation.

ABOUT COMBIMATRIX CORPORATION

We are a diversified biotechnology business, through the development of proprietary technologies, products and services in the areas of drug development, genetic analysis, molecular diagnostics, nanotechnology research, defense and homeland security markets, as well as other potential markets where our products and services could be utilized. The technologies we have developed include a platform technology to rapidly produce customizable, in-situ synthesized, oligonucleotide arrays for use in identifying and determining the roles of genes, gene mutations and proteins. This technology has a wide range of potential applications in the areas of genomics, proteomics, biosensors, drug discovery, drug development, diagnostics, combinatorial chemistry, material sciences and nanotechnology. We have also developed the capabilities of producing arrays that utilize bacterial artificial chromosomes on our arrays, also enabling genetic analysis. Other technologies include proprietary molecular synthesis and screening methods for the discovery of potential new drugs. CombiMatrix Molecular Diagnostics, Inc. (``CMDX''), our wholly owned subsidiary located in Irvine, California, has developed capabilities of producing arrays that utilize bacterial artificial chromosomes, which also enable genetic analysis.

Additional information about CombiMatrix Corporation is available at http://www.combimatrix.com or by calling 1-800-985 CBMX (2269). Additional information about our laboratory, CombiMatrix Molecular Diagnostics, is available at http://www.cmdiagnostics.com or by calling 1-800-710-0624.

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

This news 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 and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including the recent economic slowdown affecting technology companies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory, and competitive developments, and general economic conditions. Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Forms 8-K and 8-K/A, and other SEC filings discuss some of the important risk factors that may affect our business, results of operations, and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

          CombiMatrix Corporation
          Amit Kumar, Ph.D., President & CEO 
          (425) 493-2000
          Fax: (425) 493-2010