<SUBMISSION>
<ACCESSION-NUMBER>0001019687-03-001540
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<CIK>0000934549
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<FISCAL-YEAR-END>1231
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<FILE-NUMBER>000-26068
<FILM-NUMBER>03808820
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<BUSINESS-ADDRESS>
<STREET1>500 NEWPORT CENTER DRIVE
<STREET2>7TH FLOOR
<CITY>NEWPORT BEACH
<STATE>CA
<ZIP>92660
<PHONE>9494808300
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<FILENAME>acacia_8k-072903.txt
<TEXT>
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 8-K

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

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                                  JULY 29, 2003
                DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)

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

                           ACACIA RESEARCH CORPORATION
             (Exact name of Registrant as specified in its Charter)


         Delaware                  000-26068                    95-4405754
         --------                  ---------                    ----------
(State or Other Jurisdiction      (Commission                 (I.R.S. Employer
       of Incorporation)          File Number)               Identification No.)


                            500 Newport Center Drive,
                         Newport Beach, California 92660
                    (Address of Principal Executive Offices)


                                 (949) 480-8300
               Registrant's telephone number, including area code


                                 Not Applicable
          (Former Name or Former Address, if Changed since Last Report)

<PAGE>

ITEM 7.  EXHIBITS.

         (c)      Exhibits.

                  99.1 Press Release dated July 29, 2003 of the Registrant.


ITEM 12.  DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

         On July 29, 2003, Acacia Research Corporation issued a press release
announcing its earnings for the quarter ended June 30, 2003. A copy of that
release is furnished as Exhibit 99.1 to this report.

         The information in this Current Report on Form 8-K is being furnished
and shall not be deemed "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that Section. The information in this Current Report shall not be incorporated
by reference into any registration statement or other document pursuant to the
Securities Act of 1933, as amended.



                                   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, hereunto duly authorized.


                                     ACACIA RESEARCH CORPORATION


Date:  July 29, 2003                 By:  /s/ Paul R. Ryan
                                     -----------------------------------
                                     Name:  Paul R. Ryan
                                     Title: Chairman and Chief Executive Officer



                                       -2-
<PAGE>


                                  Exhibit Index




Exhibit Number            Description
--------------            -----------


   99.1                   Press Release dated July 29, 2003, of the Registrant.






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>acacia_8kex99-1.txt
<TEXT>
<PAGE>

Exhibit 99.1


[ACACIA
RESEARCH
CORPORATION
LOGO HERE]

                                                           CONTACTS: Rob Stewart
                                                              Investor Relations
FOR RELEASE                                                   Tel (949) 480-8300
-----------                                                   Fax (949) 480-8301
July 29, 2003


                             ACACIA RESEARCH REPORTS
                             SECOND QUARTER RESULTS


         Newport Beach, Calif. - (BUSINESS WIRE) - July 29, 2003 - Acacia
Research Corporation (Nasdaq: ACTG; CBMX) today reported results for the three
months ended June 30, 2003. Acacia Research Corporation comprises two operating
groups, the Acacia Technologies group and the CombiMatrix group.

ACACIA RESEARCH CORPORATION CONSOLIDATED

FINANCIAL RESULTS

         Consolidated revenues for the second quarter of 2003 were $25,000
versus $438,000 in the comparable 2002 period. Second quarter 2003 revenues were
primarily comprised of Digital Media Transmission ("DMT") license fees
recognized by the Acacia Technologies group and service and maintenance contract
revenue recognized by the CombiMatrix group related to a DNA microarray
synthesizer system sold to Keio University School of Medicine in the first
quarter of 2003.

         The second quarter 2003 consolidated net loss was $6,774,000 versus a
consolidated net loss of $9,701,000 in the comparable 2002 period. Included in
the second quarter 2003 consolidated net loss are non-cash charges totaling
$1,382,000, comprised of non-cash stock compensation amortization charges of
$776,000, a non-cash write down of our investment in ADX Corporation of $207,000
and non-cash amortization of patents totaling $399,000. Non-cash stock
compensation amortization charges and non-cash amortization of patents totaled
$2,143,000 and $564,000, respectively, in the comparable 2002 period.

         Consolidated research and development expenses, comprised of costs
incurred by the CombiMatrix group, decreased to $2,158,000 from $5,026,000 in
the comparable 2002 period, primarily due to the CombiMatrix group's completion
of several research and development projects in the third and fourth quarters of
2002 pursuant to its agreements with Roche Diagnostics, GmbH ("Roche"),
resulting in a reduction of related research and development expenses during
2003, as compared to 2002.

         Consolidated marketing, general and administrative expenses decreased
to $3,552,000 from $5,516,000 in the comparable 2002 period, primarily due to a
reduction in professional fees related to Acacia Research Corporation's
recapitalization and merger transactions completed in December 2002, a reduction
in corporate legal expenses, and a reduction in overhead due to reduced general
and administrative personnel compared to the prior year quarter. The decrease
was partially offset by an increase in costs related to Acacia Technologies
group's ongoing DMT patent commercialization and enforcement efforts, including
increased legal and engineering costs related to new patent claims and the
identification of potential licensees of our DMT technology.

         Minority interests in the net losses of subsidiaries decreased to
$24,000 from $4,104,000 in the comparable 2002 period, due to Acacia Research
Corporation's acquisition of 100% of the ownership interests in CombiMatrix
Corporation in December 2002.

                                       1
<PAGE>

FINANCIAL CONDITION

         Total consolidated assets were $95,639,000 as of June 30, 2003 compared
to $97,071,000 as of December 31, 2002. Cash and cash equivalents and short-term
investments on a consolidated basis totaled $55,103,000 as of June 30, 2003
compared to $54,688,000 as of December 31, 2002.

         During the second quarter of 2003, CombiMatrix Corporation received
total cash payments of $5,808,000 consisting of $4,500,000 related to the
completion of certain milestones and $308,000 related to the delivery of
prototype products and services pursuant to its agreements with Roche and an
up-front payment of $1,000,000 pursuant to its agreement with Toppan Printing
Corporation ("Toppan"), which have been recorded as deferred revenues. Total
cash payments received from Roche since the inception of our relationship in
July 2001 total $23,294,000. Total consolidated deferred revenues at June 30,
2003 were $18,110,000, comprised of $16,558,000 for the CombiMatrix group and
$1,552,000 for the Acacia Technologies group.

         In May 2003, Acacia Research Corporation completed a private placement
of approximately 2.4 million units of its Acacia Research-CombiMatrix common
stock and warrants at a price of $2.20 per unit. Net proceeds of approximately
$4,875,000 from the private placement were attributed to the CombiMatrix group.


ACACIA TECHNOLOGIES GROUP
(A DIVISION OF ACACIA RESEARCH CORPORATION)

FINANCIAL RESULTS

         DMT license fee revenues for the second quarter of 2003 were $19,000
versus no license fee revenues in the comparable 2002 period. Since November
2002, the Acacia Technologies group has entered into 27 license agreements for
its DMT technology, 13 of which were executed in the second quarter of 2003. All
of the Acacia Technologies group's DMT license agreements provide for recurring
license fee payments to be made by the respective licensees over the term of the
licenses.

         The second quarter 2003 division net loss was $1,577,000 versus
$3,806,000 in the comparable 2002 period. Included in the second quarter 2003
division net loss are non-cash charges totaling $332,000, comprised of a
non-cash write down of our investment in ADX Corporation of $207,000 and
non-cash amortization of patents totaling $125,000. Non-cash amortization of
patents totaled $465,000 in the comparable 2002 period.

         Marketing, general and administrative expenses decreased to $1,453,000
from $2,589,000 in the comparable 2002 period, primarily due to a reduction in
professional fees related to Acacia Research Corporation's recapitalization and
merger transactions completed in December 2002, a reduction in corporate legal
expenses, and a reduction in overhead due to reduced general and administrative
personnel compared to the prior year quarter. The decrease was partially offset
by an increase in costs related to Acacia Technologies group's ongoing DMT
patent commercialization and enforcement efforts, including increased legal and
engineering costs related to new patent claims and the identification of
potential licensees of our DMT technology.

FINANCIAL CONDITION

         Total assets for the Acacia Technologies group were $42,919,000 as of
June 30, 2003 compared to $47,212,000 as of December 31, 2002. Cash and cash
equivalents and short-term investments totaled $35,840,000 as of June 30, 2003
compared to $39,792,000 as of December 31, 2002.

                                       2
<PAGE>

COMBIMATRIX GROUP
(A DIVISION OF ACACIA RESEARCH CORPORATION)

FINANCIAL RESULTS

         Revenues for the second quarter of 2003 were $6,000 versus $438,000 in
the comparable 2002 period. Second quarter 2003 revenues were comprised of
service and maintenance contract revenue related to a DNA microarray synthesizer
system sold to Keio University School of Medicine in the first quarter of 2003.

         The second quarter 2003 division net loss was $5,197,000 versus a
division net loss of $5,895,000 in the comparable 2002 period. Included in the
second quarter 2003 division net loss are non-cash charges totaling $1,050,000,
comprised of non-cash stock compensation amortization charges of $776,000 and
non-cash amortization of patents totaling $274,000. Non-cash stock compensation
amortization charges and non-cash amortization of patents totaled $2,135,000 and
$99,000, respectively, in the comparable 2002 period.

         Research and development costs incurred by the CombiMatrix group
decreased to $2,158,000 from $5,026,000 in the comparable 2002 period, primarily
due to the CombiMatrix group's completion of several research and development
projects in the third and fourth quarters of 2002 pursuant to its agreements
with Roche, resulting in a reduction of related research and development
expenses during 2003, as compared to 2002.

         Marketing, general and administrative expenses decreased to $2,099,000
from $2,927,000 in the comparable 2002 period, primarily due to a reduction in
corporate legal expenses and professional fees related to Acacia Research
Corporation's recapitalization and merger transactions completed in December
2002.

         Minority interests in the net losses of subsidiaries decreased to
$24,000 from $3,979,000 in the comparable 2002 period, due to Acacia Research
Corporation's acquisition of 100% of the ownership interests in CombiMatrix
Corporation in December 2002.

FINANCIAL CONDITION

         Total assets for the CombiMatrix group were $52,909,000 as of June 30,
2003 compared to $49,973,000 as of December 31, 2002. Cash and cash equivalents
and short-term investments totaled $19,263,000 as of June 30, 2003 compared to
$14,896,000 as of December 31, 2002.

         During the second quarter of 2003, CombiMatrix Corporation received
total cash payments of $5,808,000 consisting of $4,500,000 related to the
completion of certain milestones and $308,000 related to the delivery of
prototype products and services pursuant to its agreements with Roche and an
up-front payment of $1,000,000 pursuant to its agreement with Toppan, which have
been recorded as deferred revenues. Total cash payments received from Roche
since the inception of the relationship in July 2001 total $23,294,000. Total
deferred revenues at June 30, 2003 were $16,558,000.

         In May 2003, Acacia Research Corporation completed a private placement
of approximately 2.4 million units of its Acacia Research-CombiMatrix common
stock and warrants at a price of $2.20 per unit. Net proceeds of approximately
$4,875,000 from the private placement were attributed to the CombiMatrix group.

                                       3
<PAGE>

BUSINESS HIGHLIGHTS
-------------------

         Business highlights of the second quarter include:

         ACACIA TECHNOLOGIES GROUP:

         o        In May 2003, the Acacia Technologies group licensed its DMT
                  technology to LodgeNet Entertainment Corporation ("LodgeNet"),
                  the industry-leader for hotel video-on-demand. LodgeNet
                  provides on-demand movies and other services to 5,700 hotel
                  properties with 960,000 rooms serving 260 million guests
                  annually.

                  The Acacia Technologies group will receive recurring quarterly
                  licensing fees from LodgeNet, commencing in the third quarter
                  of 2003 and ending upon the expiration of the DMT patents, for
                  each of its digital rooms. LodgeNet has deployed digital
                  services in 300,000 of its rooms and plans to have digital
                  services installed in over 40% of its 960,000 rooms by the end
                  of 2003.


         COMBIMATRIX GROUP:

         o        In April 2003, the CombiMatrix group's Japanese subsidiary
                  sold a DNA microarray synthesizer to Nihon Gene Research
                  Laboratory ("NGRL"). Under the terms of the agreement, NGRL
                  purchased a CombiMatrix custom slide bio-chip synthesizer and
                  entered into a multi-year agreement to purchase bio-chips that
                  will be used to provide contract research services in Japan.
                  CombiMatrix and NGRL also entered into a co-development and
                  research agreement to investigate various aspects of genetic
                  analysis.

         o        In April 2003, CombiMatrix designed and fabricated the first
                  microarray based on the SARS (Severe Acute Respiratory
                  Syndrome) coronavirus genome. The first microarrays were
                  fabricated within 48 hours of publication of the coronavirus
                  genome sequence believed to be responsible for SARS,
                  underscoring CombiMatrix's ability to rapidly design and build
                  custom microarrays. Due to the public health and economic
                  implications of SARS, CombiMatrix made the decision to provide
                  a limited number of the new SARS microarrays to key government
                  and academic researchers at no cost.

         o        In May 2003, CombiMatrix produced pools of small interfering
                  RNA molecules directed at specific genes of the SARS
                  coronavirus. CombiMatrix is collaborating with the National
                  Institute of Allergy and Infectious Diseases, a division of
                  the National Institutes of Health and the U.S. Army Medical
                  Research Institute of Infectious Diseases to conduct the
                  initial screening of the siRNA samples against the SARS
                  coronavirus.

         o        In May 2003, CombiMatrix entered into a multi-year strategic
                  alliance with Toppan to develop and manufacture microarrays
                  utilizing CombiMatrix's proprietary electrochemical detection
                  approach. Under the terms of the agreement, Toppan paid
                  CombiMatrix an upfront fee of $1.0 million and will make
                  additional development and milestones payments. CombiMatrix
                  and Toppan will co-develop semiconductor microarrays for
                  applications in life sciences research and development as well
                  as diagnostics.

         o        In June 2003, CombiMatrix launched Express Track(sm), a drug
                  discovery program which integrates advanced bioinformatic
                  design applications with CombiMatrix's proprietary chip-based
                  synthesis technologies to rapidly produce pools of siRNA
                  molecules. The initial focus of Express Track(sm) is common
                  viral diseases.

         o        In June 2003, CombiMatrix entered into a license agreement
                  with Nanomaterials Discovery Corporation ("NDC") based on
                  CombiMatrix's platform technology. Under the terms of the
                  agreement, NDC will have a license to use CombiMatrix's
                  microarray technology to augment and accelerate its own


                                       4
<PAGE>

                  nano-material discovery program. CombiMatrix will share in the
                  revenue from the commercialization of any newly discovered
                  materials. CombiMatrix will also receive a license to
                  intellectual property owned by NDC.

         o        In June 2003, CombiMatrix began collaborating with the
                  research group of Dr. Bonaventura Clotet, M.D., Ph.D., of the
                  Retrovirology Laboratory irsiCaixa, a leading research and
                  treatment center for AIDS in Europe, to conduct the initial
                  efficacy screening of pooled siRNA compounds against Human
                  Immunodeficiency Virus, Type-1.

         A conference call is scheduled for today at 1:30 p.m. Pacific Time
(4:30 p.m. Eastern). Paul R. Ryan, Chairman and CEO of Acacia Research
Corporation, Robert "Chip" Harris, President, and Amit Kumar, Ph.D., CEO of
CombiMatrix Corporation will host the call.

         To listen to the presentation by phone, dial (800) 838-4403 for
domestic callers and (973) 317-5319 for international callers. A replay of the
audio presentation will be available for 30 days at (800) 428-6051 for domestic
callers and (973) 709-2089 for international callers, both of whom will need to
enter the code 301111 when prompted.

         The call is being webcast by CCBN and can be accessed at Acacia
Research Corporation's website at www.acaciaresearch.com.


ABOUT ACACIA RESEARCH CORPORATION

Acacia Research Corporation comprises two operating groups, Acacia Technologies
Group and CombiMatrix Group.

The CombiMatrix group is developing a platform technology to rapidly produce
customizable active biochips, which are semiconductor-based tools for use in
identifying and determining the roles of genes, gene mutations and proteins.
CombiMatrix's technology has a wide range of applications including DNA
synthesis/diagnostics, drug discovery, and immunochemical detection.
CombiMatrix's Express Track(sm) drug discovery program is a systems biology
approach, using its technology, to target common viral diseases with siRNA
compounds.

The Acacia Technologies group licenses its DMT and V-Chip technologies to media
and electronics companies. The DMT technology covers the transmission and
receipt of digital audio and digital video content, commonly known as audio
on-demand, video on-demand, and audio/video streaming, and is supported by 5
U.S. and 17 international patents.

Acacia Research-Acacia Technologies (Nasdaq: ACTG) and Acacia
Research-CombiMatrix (Nasdaq:CBMX) are both classes of common stock issued by
Acacia Research Corporation and are intended to reflect the performance of the
respective operating groups and are not issued by the operating groups.

Information about Acacia Research Corporation and the Acacia Technologies group
is available at www.acaciaresearch.com. Information about the CombiMatrix group
is available at www.combimatrix.com.

                                       5
<PAGE>

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.



                                       6
<PAGE>

                           ACACIA RESEARCH CORPORATION
                          SUMMARY FINANCIAL INFORMATION
             (IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
                                   (UNAUDITED)

CONSOLIDATED BALANCE SHEET INFORMATION

                                                  JUNE 30,          DECEMBER 31,
                                                    2003                2002
                                                    ----                ----

Total Assets                                       $95,639            $97,071
                                                   ========           ========
Total Liabilities                                  $25,658            $19,041
                                                   ========           ========
Minority Interests                                 $ 1,784            $ 2,171
                                                   ========           ========
Total Stockholders' Equity                         $68,197            $75,859
                                                   ========           ========

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                THREE MONTHS ENDED
                                                                          --------------------------------
                                                                          JUNE 30, 2003      JUNE 30, 2002
                                                                          -------------      -------------
<S>                                                                       <C>                <C>
Revenues:
     License fee income ..............................................    $         19       $         --
     Product revenue .................................................              --                274
     Grant and contract revenue ......................................               6                164
                                                                          -------------      -------------

     Total revenues ..................................................              25                438
                                                                          -------------      -------------

Operating expenses:
     Cost of sales ...................................................              --                253
     Research and development expenses ...............................           2,158              5,026
     Non-cash stock compensation expense - research and development ..             280                692
     Marketing, general and administrative expenses ..................           3,552              5,516
     Non-cash stock compensation
       expense - marketing, general and administrative ...............             496              1,451
     Amortization of patents .........................................             399                564
                                                                          -------------      -------------

     Total operating expenses ........................................           6,885             13,502
                                                                          -------------      -------------

     Operating loss ..................................................          (6,860)           (13,064)
                                                                          -------------      -------------

Total other (expense) income .........................................              (4)              (816)
                                                                          -------------      -------------

Loss from continuing operations
  before income taxes and minority interests .........................          (6,864)           (13,880)

Benefit for income taxes .............................................              66                 75
                                                                          -------------      -------------

Loss from continuing operations before minority interests ............          (6,798)           (13,805)

Minority interests ...................................................              24              4,104
                                                                          -------------      -------------

Net loss .............................................................    $     (6,774)      $     (9,701)
                                                                          =============      =============


Loss per common share:
Attributable to the Acacia Technologies group:
  Net loss ...........................................................    $     (1,577)      $     (3,806)
    Basic and diluted per share ......................................           (0.08)             (0.19)

Attributable to the CombiMatrix group:
  Net loss ...........................................................    $     (5,197)      $     (5,895)
    Basic and diluted per share ......................................           (0.21)             (0.26)

Weighted average shares - basic and diluted:
  Acacia Research - Acacia Technologies stock ........................      19,640,808         19,640,808
                                                                          =============      =============
  Acacia Research - CombiMatrix stock ................................      24,183,340         22,950,551
                                                                          =============      =============
</TABLE>


{Note: 2002 share and per-share information gives effect to Acacia Research
Corporation's recapitalization transaction as of January 1, 2002.}

                                       7
<PAGE>

                            ACACIA TECHNOLOGIES GROUP
                   (A DIVISION OF ACACIA RESEARCH CORPORATION)
                          SUMMARY FINANCIAL INFORMATION
             (IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
                                   (UNAUDITED)

GROUP BALANCE SHEET INFORMATION

                                                    JUNE 30,        DECEMBER 31,
                                                      2003              2002
                                                      ----              ----

Total Assets                                        $42,919           $47,212
                                                    ========          ========
Total Liabilities                                   $ 4,750           $ 5,183
                                                    ========          ========
Minority Interests                                  $ 1,130           $ 1,487
                                                    ========          ========
Total Stockholders' Equity                          $37,039           $40,542
                                                    ========          ========

<TABLE>
<CAPTION>
GROUP STATEMENTS OF OPERATIONS

                                                               THREE MONTHS ENDED
                                                         ------------------------------
                                                         JUNE 30, 2003    JUNE 30, 2002
                                                         -------------    -------------
<S>                                                      <C>              <C>
Revenues:
  License fee income .................................   $         19     $         --
                                                         -------------    -------------

  Total revenues .....................................             19               --
                                                         -------------    -------------

Operating expenses:
  Marketing, general and administrative expenses .....            878            2,349
  Non-cash stock compensation - marketing, general and
    administrative ...................................             --                8
  Legal expenses - patents ...........................            575              240
  Amortization of patents ............................            125              465
                                                         -------------    -------------

    Total operating expenses .........................          1,578            3,062
                                                         -------------    -------------

    Operating loss ...................................         (1,559)          (3,062)
                                                         -------------    -------------

Total other (expenses) income ........................            (49)            (905)
                                                         -------------    -------------

Loss from continuing operations before
  income taxes and minority interests ................         (1,608)          (3,967)

Benefit for income taxes .............................             31               36
                                                         -------------    -------------

Loss from continuing operations before
  minority interests .................................         (1,577)          (3,931)

Minority interests ...................................             --              125
                                                         -------------    -------------

Division net loss ....................................   $     (1,577)    $     (3,806)
                                                         =============    =============
</TABLE>

                                       8
<PAGE>

                                COMBIMATRIX GROUP
                   (A DIVISION OF ACACIA RESEARCH CORPORATION)
                          SUMMARY FINANCIAL INFORMATION
             (IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
                                   (UNAUDITED)

GROUP BALANCE SHEET INFORMATION

                                                   JUNE 30,        DECEMBER 31,
                                                     2003              2002
                                                     ----              ----

Total Assets                                        $52,909          $49,973
                                                    ========         ========
Total Liabilities                                   $21,097          $13,972
                                                    ========         ========
Minority Interests                                  $   654          $   684
                                                    ========         ========
Total Stockholders' Equity                          $31,158          $35,317
                                                    ========         ========

<TABLE>
<CAPTION>
GROUP STATEMENTS OF OPERATIONS

                                                                     THREE MONTHS ENDED
                                                                -------------------------------
                                                                JUNE 30, 2003     JUNE 30, 2002
                                                                -------------     -------------
<S>                                                             <C>               <C>
Revenues:
  Product revenue ...........................................   $         --      $        274
  Grant and contract revenue ................................              6               164
                                                                -------------     -------------

Total revenues ..............................................              6               438
                                                                -------------     -------------

Operating expenses:
  Cost of sales .............................................             --               253
  Research and development expenses .........................          2,158             5,026
  Non-cash compensation expense - research and development ..            280               692
  Marketing, general and administrative expenses ............          2,099             2,927
  Non-cash compensation expense - marketing, general
    and administrative ......................................            496             1,443
  Amortization of patents ...................................            274                99
                                                                -------------     -------------

    Total operating expenses ................................          5,307            10,440
                                                                -------------     -------------

    Operating loss ..........................................         (5,301)          (10,002)
                                                                -------------     -------------

Total other income ..........................................             45                89
                                                                -------------     -------------

Loss from operations before income taxes
  and minority interests ....................................         (5,256)           (9,913)

Benefit for income taxes ....................................             35                39
                                                                -------------     -------------

Loss from operations before minority interests ..............         (5,221)           (9,874)

Minority interests ..........................................             24             3,979
                                                                -------------     -------------

Division net loss ...........................................   $     (5,197)     $     (5,895)
                                                                =============     =============
</TABLE>

                                       9

</TEXT>
</DOCUMENT>
</SUBMISSION>
