<PAGE>

[ACACIA LOGO HERE]
                                                           CONTACTS: Rob Stewart
                                                              Investor Relations
FOR RELEASE                                                   Tel (949) 480-8300
-----------                                                   Fax (949) 480-8301
February 19, 2004


                     ACACIA RESEARCH REPORTS FOURTH QUARTER
                         AND YEAR END FINANCIAL RESULTS


         Newport Beach, Calif. - (BUSINESS WIRE) - February 19, 2004 - Acacia
Research Corporation (Nasdaq: ACTG; CBMX) today reported results for the three
months and the year ended December 31, 2003. Acacia Research Corporation
comprises two operating groups, the CombiMatrix group and the Acacia
Technologies group.

         "The CombiMatrix group progressed in its strategic alliances with Roche
and Toppan in the development of its microarray products and expanded its drug
discovery, diagnostics and nanomaterials initiatives with new alliances and
collaborations. During the fourth quarter the CombiMatrix group received
$1,442,000 in milestone payments from Toppan, which were recorded as deferred
revenue. During 2003, CombiMatrix Corporation received total cash payments of
$12,776,000, consisting primarily of $9,811,000 pursuant to its agreements with
Roche and payments of $2,442,000 pursuant to its agreement with Toppan. Total
cash payments received from Roche since the inception of our strategic alliance
are $26,567,000," stated CombiMatrix CEO and President, Dr. Amit Kumar.

         "The Acacia Technologies group continued to roll out its Digital Media
Transmission technology licensing program and entered into 72 new licensing
agreements in the fourth quarter, bringing total DMT licensing agreements to
115. Fourth quarter licensing revenues increased to $481,000, from $186,000 in
the previous quarter, and do not include fourth quarter license fees due from a
number of licensees, which will be recognized as revenues when received in the
first quarter of 2004. All of our license agreements provide for recurring
payments," commented Chairman and CEO, Paul Ryan.


ACACIA RESEARCH CORPORATION CONSOLIDATED

FINANCIAL RESULTS

         Consolidated revenues for the fourth quarter of 2003 were $534,000
versus $16,000 in the comparable 2002 period. Fourth 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 related to a DNA microarray synthesizer system sold to Keio University
School of Medicine and other product sales recognized by the CombiMatrix group
during the quarter.

         Consolidated revenues for the year ended December 31, 2003 were
$1,148,000 versus $882,000 for the year ended December 31, 2002. 2003 revenues
were comprised of DMT licensing fees totaling $692,000 recognized by our Acacia
Technologies group and $407,000 in product sales to several Japanese government
institutions and $49,000 in related service and maintenance contract revenues
recognized by CombiMatrix Corporation's Japanese subsidiary.

                                       1
<PAGE>

         The fourth quarter 2003 consolidated net loss was $5,147,000 versus
$22,223,000 in the comparable 2002 period. Included in the fourth quarter 2003
consolidated net loss are non-cash charges totaling $807,000, comprised of
non-cash stock compensation amortization charges of $75,000, non-cash patent
amortization charges of $399,000 and depreciation charges totaling $333,000.
Non-cash stock compensation amortization charges, non-cash patent amortization
charges and depreciation charges totaled $844,000, $312,000 and $370,000,
respectively, in the comparable 2002 period. The fourth quarter 2002
consolidated net loss also included a non-cash charge for acquired in-process
research and development of $17,237,000.

         The 2003 consolidated net loss was $24,420,000 versus $58,973,000 in
2002. Included in the 2003 consolidated net loss are non-cash charges totaling
$4,680,000, comprised of non-cash stock compensation amortization charges of
$1,655,000, non-cash patent amortization charges of $1,597,000 and depreciation
charges totaling $1,428,000. Non-cash stock compensation amortization charges,
non-cash patent amortization charges and depreciation charges totaled
$6,427,000, $1,990,000 and $1,573,000, respectively, in 2002. The 2002
consolidated net loss also includes a non-cash charge for acquired in-process
research and development of $17,237,000, and a non-cash charge of $8,334,000
after minority interests ($17,471,000 before minority interests) related to the
settlement of litigation with Nanogen Inc. in September 2002.

         Consolidated research and development expenses, comprised of costs
incurred by the CombiMatrix group, decreased to $8,098,000 in 2003 from
$18,187,000 in 2002, 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 $15,061,000 in 2003 from $18,632,000 in 2002, 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 2002. 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
additional potential licensees of our DMT technology.

         Minority interests in the net losses of subsidiaries decreased to
$47,000 in 2003 from $23,806,000 in 2002, due to Acacia Research Corporation's
acquisition of the remaining ownership interests in CombiMatrix Corporation in
December 2002 and in Advanced Material Sciences and CombiMatrix KK in July 2003.

FINANCIAL CONDITION

         Total consolidated assets were $90,040,000 as of December 31, 2003
compared to $97,071,000 as of December 31, 2002. Cash and cash equivalents and
short-term investments on a consolidated basis totaled $50,500,000 as of
December 31, 2003 compared to $54,688,000 as of December 31, 2002.

         During 2003, CombiMatrix Corporation received total cash payments of
$12,776,000, consisting primarily of $9,811,000 related to the completion of
certain milestones and delivery of prototype products and services pursuant to
its agreements with Roche and an up-front payment of $1,000,000 and subsequent
milestone payments of $1,442,000 pursuant to its agreement with Toppan
Corporation, ("Toppan"), all of which have been recorded as deferred revenues.
Total cash payments received from Roche since the inception of our relationship
in July 2001 total $26,567,000. Total consolidated deferred revenues at December
31, 2003 were $22,009,000, comprised of $20,405,000 for the CombiMatrix group
and $1,604,000 for the Acacia Technologies group.

                                       2
<PAGE>

COMBIMATRIX GROUP
(A DIVISION OF ACACIA RESEARCH CORPORATION)

FINANCIAL RESULTS

         Revenues for the fourth quarter of 2003 were $53,000 versus $16,000 in
the comparable 2002 period. Fourth quarter 2003 revenues include $26,000 of
service and maintenance contract revenues related to the sale of two DNA
microarray synthesizer systems and $27,000 of microarray and other product sales
primarily to the CombiMatrix group's Japanese customers.

         Revenues for the year ended December 31, 2003 were $456,000 versus
$839,000 in the comparable 2002 period. 2003 revenues include $407,000 from the
sale of two DNA microarray synthesizer systems and related microarray product
sales and $49,000 in related service and maintenance contract revenues.

         The fourth quarter 2003 division net loss was $4,065,000 versus
$21,392,000 in the comparable 2002 period. Included in the fourth quarter 2003
division net loss are non-cash charges totaling $662,000, comprised of non-cash
stock compensation amortization charges of $75,000, non-cash amortization of
patents totaling $274,000 and depreciation charges totaling $313,000. Non-cash
stock compensation amortization charges, non-cash amortization of patents and
depreciation charges totaled $844,000, $117,000 and $322,000 respectively, in
the comparable 2002 period. The fourth quarter 2002 consolidated net loss also
included a non-cash charge for acquired in-process research and development of
$17,237,000.

         The 2003 division net loss was $18,969,000 versus $46,219,000 in 2002.
Included in the 2003 division net loss are non-cash charges totaling $4,064,000,
comprised of non-cash stock compensation amortization charges of $1,655,000,
non-cash amortization of patents totaling $1,095,000 and depreciation charges
totaling $1,314,000. Non-cash stock compensation amortization charges, non-cash
amortization of patents and depreciation charges totaled $6,408,000, $399,000
and $1,364,000, respectively, in 2002. The 2002 division net loss also includes
a non-cash charge for acquired in-process research and development of
$17,237,000, and a non-cash charge of $8,334,000 after minority interests
($17,471,000 before minority interests) related to the settlement of litigation
with Nanogen Inc. in September 2002.

         Research and development costs incurred by the CombiMatrix group
decreased to $8,098,000 in 2003 from $18,187,000 in 2002, 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 $8,858,000
in 2003 from $10,334,000 in 2002, primarily due to a decrease in marketing
costs, personnel costs and corporate legal expenses and a reduction in
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
$30,000 from $23,702,000 in the comparable 2002 period, due to Acacia Research
Corporation's acquisition of the remaining ownership interests in CombiMatrix
Corporation in December 2002 and in Advanced Material Sciences and CombiMatrix
KK in July 2003.

FINANCIAL CONDITION

         Total assets for the CombiMatrix group were $50,161,000 as of December
31, 2003 compared to $49,973,000 as of December 31, 2002. Cash and cash
equivalents and short-term investments totaled $17,299,000 as of December 31,
2003 compared to $14,896,000 as of December 31, 2002.

         During 2003, CombiMatrix Corporation received total cash payments of
$12,776,000, consisting primarily of $9,811,000 related to the completion of
certain milestones and delivery of prototype products and services pursuant to
its agreements with Roche and an up-front payment of $1,000,000 and subsequent
milestone payments of $1,442,000 pursuant to its agreement with Toppan, all of
which have been recorded as deferred revenues. Total cash payments received from
Roche since the inception of our relationship in July 2001 total $26,567,000.
Total consolidated deferred revenues at December 31, 2003 were $20,405,000 for
the CombiMatrix group.

                                       3
<PAGE>

ACACIA TECHNOLOGIES GROUP
(A DIVISION OF ACACIA RESEARCH CORPORATION)

FINANCIAL RESULTS

         DMT license fee revenues for the fourth quarter of 2003 were $481,000
versus zero in the comparable 2002 period. DMT license fee revenues for 2003
were $692,000 versus $43,000 in V-chip license fee revenues in 2002. Since
November 2002, the Acacia Technologies group has entered into 115 license
agreements for its DMT technology. Seventy-two (72) of these license agreements
were executed in the fourth 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 fourth quarter 2003 division net loss was $1,082,000 versus
$831,000 in the comparable 2002 period. Included in the fourth quarter 2003
division net loss are non-cash patent amortization and depreciation charges
totaling $145,000 versus $243,000 in the comparable 2002 period.

         The 2003 division net loss was $5,451,000 versus $12,754,000 in the
comparable 2002 period. Included in the 2003 division net loss are non-cash
patent amortization and depreciation charges totaling $616,000 versus $1,800,000
in 2002. The 2003 and 2002 division net loss includes non-cash impairment
charges totaling $207,000 and $2,748,000, respectively, related to a decline in
fair value of a cost-method investment.

         Marketing, general and administrative expenses decreased in the fourth
quarter of 2003 and for the year ended December 31, 2003 as compared to the same
periods in 2002, 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 period. 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 additional potential licensees of
our DMT technology.

FINANCIAL CONDITION

         Total assets for the Acacia Technologies group were $39,978,000 as of
December 31, 2003 compared to $47,212,000 as of December 31, 2002. Cash and cash
equivalents and short-term investments totaled $33,201,000 as of December 31,
2003 compared to $39,792,000 as of December 31, 2002.

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

         Business highlights of the fourth quarter include:

         COMBIMATRIX GROUP:

              o    In October 2003, the CombiMatrix group entered into a
                   collaboration with the Seattle Biomedical Research Institute
                   to develop RNAi compounds for gene regulation research.

              o    In November 2003, the CombiMatrix group announced that they
                   had been informed by Roche that Roche would not be launching
                   its array platform based on its collaborative efforts with
                   the CombiMatrix group in 2003, as previously indicated by
                   Roche. No new launch date has been set.

              o    In November 2003, the CombiMatrix group announced the
                   commercial launch of CustomArray(TM), to a select group of
                   beta customers in December 2003 and to the worldwide life
                   sciences community in March 2004.

                                       4
<PAGE>

              o    In November 2003, the CombiMatrix group announced that
                   Gregory L. Verdine, Harvard College Professor and Erving
                   Professor of Chemistry in Harvard University's Department of
                   Chemistry and Chemical Biology, will use CombiMatrix arrays
                   to map three-dimensional binding sites for oligonucleotides
                   on folded RNA molecules. This research program aims to
                   discover, in an unbiased screen, discontinuous RNA epitopes
                   that will serve as therapeutic targets for drug intervention.
                   This program may enable the discovery of new drugs and
                   approaches to modulate the operation of RNA molecules in
                   cells.

              o    In November 2003, the CombiMatrix group was notified that the
                   U.S. Army Medical Research Institute of Infectious Diseases,
                   or USAMRIID, approved a Cooperative Research and Development
                   Agreement, or CRDA with CombiMatrix Corporation on
                   "Microarray Approaches for Environmental and Medical
                   Detection of Biothreat Agents." Under the CRDA, USAMRIID and
                   CombiMatrix Corporation can exchange consultative services,
                   equipment, reagents, and testing support to demonstrate the
                   effectiveness of the CombiMatrix group's
                   Electrochemical-Detection System for identifying biothreat
                   agents.

              o    In December 2003, the CombiMatrix group received payments of
                   $1,442,000 as part of its strategic alliance with Toppan.

         ACACIA TECHNOLOGIES GROUP:

              o    Since November 2002, the Acacia Technologies group has
                   entered into 115 license agreements for its DMT technology.
                   72 of these license agreements were executed in the fourth
                   quarter of 2003. Licensees include LodgeNet Entertainment
                   Corporation, an industry-leader for hotel video-on-demand,
                   Grupo Pegaso, a partner with Spain's Telefonica in Mexico's
                   second largest mobile telephony company, Virgin Radio, a
                   digital broadcast company, CinemaNow, Inc., an Internet movie
                   company, 24/7 University, Inc., an e-learning company
                   providing courses containing audio/video content to corporate
                   customers, General Dynamics Interactive Corporation, which
                   provides digital video-on-demand and high speed Internet
                   access to the lodging industry, and adult Internet Streaming
                   Companies including Interactive Gallery, Inc., a wholly owned
                   subsidiary of New Frontier Media, Inc., L.F.P., Inc. (owner
                   of the Hustler websites), Vivid Entertainment, LLC., SBO
                   Pictures, Inc. d/b/a Wicked Pictures and Private Media Group.
                   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.

              o    In November 2003, Acacia Media Technologies initiated a
                   patent infringement lawsuit in the California District Court
                   against On Command Corporation, provider of interactive
                   in-room entertainment, information and business services to
                   the lodging industry, regarding Acacia Media Technologies'
                   DMT technology.

         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 and
President of CombiMatrix Corporation will host the call.

         To listen to the presentation by phone, dial (800) 915-4836 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 337810 when prompted.

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

                                       5
<PAGE>

ABOUT ACACIA RESEARCH CORPORATION

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

The Acacia Technologies group develops, acquires, and licenses patented
technologies. Acacia's DMT technology, which is supported by 5 U.S. and 31
foreign patents, relates to audio and audio/video transmission and receiving
systems, commonly known as audio-on-demand, video-on-demand, and audio/video
streaming, and is used for distributing digital content via several means
including Internet, cable, satellite and wireless systems.

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.

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 the Acacia Technologies group and the CombiMatrix group is
available at www.acaciaresearch.com.



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

                                     DECEMBER 31,       DECEMBER 31,
                                        2003                2002
                                     -----------        -----------
Total Assets                         $   90,040         $   97,071
                                     ===========        ===========
Total Liabilities                    $   28,513         $   19,041
                                     ===========        ===========
Minority Interests                   $    1,127         $    2,171
                                     ===========        ===========
Total Stockholders' Equity           $   60,400         $   75,859
                                     ===========        ===========


CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                         FOR THE THREE MONTHS ENDED     FOR THE TWELVE MONTHS ENDED
                                                                       -----------------------------   -----------------------------
                                                                        DECEMBER 31,    DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                                           2003            2002            2003             2002
                                                                       -------------   -------------   -------------   -------------
<S>                                                                    <C>             <C>             <C>             <C>
Revenues:
    License fee income ..............................................  $        481    $         --    $        692    $         43
    Product revenue .................................................            27               9             407             306
    Grant and contract revenue ......................................            26               7              49             533
                                                                       -------------   -------------   -------------   -------------

         Total revenues .............................................           534              16           1,148             882
                                                                       -------------   -------------   -------------   -------------
Operating expenses:
    Cost of sales ...................................................             6               4              99             263
    Research and development expenses ...............................         1,880           4,044           8,098          18,187
    Charge for acquired in-process research and development .........            --          17,237              --          17,237
    Non-cash stock compensation expense - research and development ..           (59)              1             466           1,868
    Marketing, general and administrative expenses ..................         3,577           4,379          15,061          18,632
    Non-cash stock compensation expense - marketing,
      general and administrative ....................................           134             843           1,189           4,559
    Amortization of patents .........................................           399             312           1,597           1,990
    Legal settlement charges ........................................            --              --              --          18,471
                                                                       -------------   -------------   -------------   -------------
         Total operating expenses ...................................         5,937          26,820          26,510          81,207
                                                                       -------------   -------------   -------------   -------------
         Operating loss .............................................        (5,403)        (26,804)        (25,362)        (80,325)
                                                                       -------------   -------------   -------------   -------------
Other income (expenses) .............................................           162             968             622          (3,111)
                                                                       -------------   -------------   -------------   -------------
Loss from operations before income taxes and minority interests .....        (5,241)        (25,836)        (24,740)        (83,436)
Benefit for income taxes ............................................            77             426             273             857
                                                                       -------------   -------------   -------------   -------------

Loss from operations before minority interests ......................        (5,164)        (25,410)        (24,467)        (82,579)
Minority interests ..................................................            17           3,187              47          23,806
                                                                       -------------   -------------   -------------   -------------
Loss from continuing operations .....................................        (5,147)        (22,223)        (24,420)        (58,773)
Discontinued operations:
    Estimated loss on disposal of discontinued operation ............            --              --              --            (200)
                                                                       -------------   -------------   -------------   -------------
Net loss ............................................................  $     (5,147)   $    (22,223)   $    (24,420)   $    (58,973)
                                                                       =============   =============   =============   =============
Loss per share:
Attributable to the Acacia Technologies group:
    Loss from continuing operations .................................  $     (1,082)   $       (831)   $     (5,451)   $    (12,554)
         Basic and diluted per share ................................         (0.05)          (0.04)          (0.28)          (0.64)
    Loss from discontinued operations ...............................            --              --              --            (200)
         Basic and diluted per share ................................            --              --              --           (0.01)
    Net loss ........................................................  $     (1,082)   $       (831)   $     (5,451)   $    (12,754)
         Basic and diluted per share ................................         (0.05)          (0.04)          (0.28)          (0.65)

Attributable to the CombiMatrix group:
    Loss from continuing operations .................................  $     (4,065)   $    (21,392)   $    (18,969)   $    (46,219)
         Basic and diluted per share ................................         (0.16)          (0.93)          (0.76)          (2.01)
    Net loss ........................................................  $     (4,065)   $    (21,392)   $    (18,969)   $    (46,219)
         Basic and diluted per share ................................         (0.16)          (0.93)          (0.76)          (2.01)

Weighted average shares - basic and diluted:
    Acacia Research - Acacia Technologies stock .....................    19,718,377      19,640,808      19,661,655      19,640,808
                                                                       =============   =============   =============   =============
    Acacia Research - CombiMatrix stock .............................    26,207,146      22,951,324      24,827,819      22,950,746
                                                                       =============   =============   =============   =============
</TABLE>


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

                                       7
<PAGE>

                                COMBIMATRIX GROUP
                   (A DIVISION OF ACACIA RESEARCH CORPORATION)
                          SUMMARY FINANCIAL INFORMATION
                                 (IN THOUSANDS)
                                   (UNAUDITED)

GROUP BALANCE SHEET INFORMATION

                                     DECEMBER 31,       DECEMBER 31,
                                         2003              2002
                                     -----------        -----------
Total Assets                         $   50,161         $   49,973
                                     ===========        ===========
Total Liabilities                    $   24,424         $   13,972
                                     ===========        ===========
Minority Interests                   $       --         $      684
                                     ===========        ===========
Total Stockholders' Equity           $   25,737         $   35,317
                                     ===========        ===========


GROUP STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                    FOR THE THREE MONTHS ENDED    FOR THE TWELVE MONTHS ENDED
                                                                    ---------------------------   ---------------------------
                                                                    DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                                        2003           2002           2003           2002
                                                                    ------------   ------------   ------------   ------------
<S>                                                                 <C>            <C>            <C>            <C>
Revenues:
     Product revenue ............................................   $        27    $         9    $       407    $       306
     Grant and contract revenue .................................            26              7             49            533
                                                                    ------------   ------------   ------------   ------------

          Total revenues ........................................            53             16            456            839
                                                                    ------------   ------------   ------------   ------------
Operating expenses:
     Cost of sales ..............................................             6              4             99            263
     Research and development expenses ..........................         1,880          4,044          8,098         18,187
     Charge for acquired in-process research and development ....            --         17,237             --         17,237
     Non-cash compensation expense - research and development ...           (59)             1            466          1,868
     Marketing, general and administrative expenses .............         1,966          2,510          8,858         10,334
     Non-cash compensation expense - marketing, general
       and administrative .......................................           134            843          1,189          4,540
     Amortization of patents ....................................           274            117          1,095            399
     Legal settlement charges ...................................            --             --             --         18,471
                                                                    ------------   ------------   ------------   ------------
          Total operating expenses ..............................         4,201         24,756         19,805         71,299
                                                                    ------------   ------------   ------------   ------------
          Operating loss ........................................        (4,148)       (24,740)       (19,349)       (70,460)
                                                                    ------------   ------------   ------------   ------------

Other income ....................................................            49             46            214            392
                                                                    ------------   ------------   ------------   ------------
Loss from operations before income taxes
  and minority interests ........................................        (4,099)       (24,694)       (19,135)       (70,068)

Benefit for income taxes ........................................            34             34            136            147
                                                                    ------------   ------------   ------------   ------------
Loss from operations before minority interests ..................        (4,065)       (24,660)       (18,999)       (69,921)

Minority interests ..............................................            --          3,268             30         23,702
                                                                    ------------   ------------   ------------   ------------
Division net loss ...............................................   $    (4,065)   $   (21,392)   $   (18,969)   $   (46,219)
                                                                    ============   ============   ============   ============
</TABLE>

                                       8
<PAGE>

                            ACACIA TECHNOLOGIES GROUP
                   (A DIVISION OF ACACIA RESEARCH CORPORATION)
                          SUMMARY FINANCIAL INFORMATION
                                 (IN THOUSANDS)
                                   (UNAUDITED)

GROUP BALANCE SHEET INFORMATION

                                      DECEMBER 31,       DECEMBER 31,
                                          2003               2002
                                      -----------        -----------

Total Assets                          $   39,978         $   47,212
                                      ===========        ===========
Total Liabilities                     $    4,188         $    5,183
                                      ===========        ===========
Minority Interests                    $    1,127         $    1,487
                                      ===========        ===========
Total Stockholders' Equity            $   34,663         $   40,542
                                      ===========        ===========


GROUP STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                    FOR THE THREE MONTHS ENDED    FOR THE TWELVE MONTHS ENDED
                                                                    ---------------------------   ---------------------------
                                                                    DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                                        2003           2002           2003           2002
                                                                    ------------   ------------   ------------   ------------

<S>                                                                 <C>            <C>            <C>            <C>
Revenues:
     License fee income .........................................   $       481    $        --    $       692    $        43
                                                                    ------------   ------------   ------------   ------------
          Total revenues ........................................           481             --            692             43
                                                                    ------------   ------------   ------------   ------------
Operating expenses:
     Marketing, general and administrative expenses .............         1,160          1,595          4,317          6,883
     Non-cash stock compensation expense - marketing,
       general and administrative ...............................            --             --             --             19
     Legal expenses - patents ...................................           451            274          1,886          1,415
     Amortization of patents ....................................           125            195            502          1,591
                                                                    ------------   ------------   ------------   ------------
          Total operating expenses ..............................         1,736          2,064          6,705          9,908
                                                                    ------------   ------------   ------------   ------------
          Operating loss ........................................        (1,255)        (2,064)        (6,013)        (9,865)
                                                                    ------------   ------------   ------------   ------------

Other income (expenses) .........................................           113            922            408         (3,503)
                                                                    ------------   ------------   ------------   ------------
Loss from continuing operations before
  income taxes and minority interests ...........................        (1,142)        (1,142)        (5,605)       (13,368)

Benefit for income taxes ........................................            43            392            137            710
                                                                    ------------   ------------   ------------   ------------

Loss from continuing operations before
  minority interests ............................................        (1,099)          (750)        (5,468)       (12,658)

Minority interests ..............................................            17            (81)            17            104
                                                                    ------------   ------------   ------------   ------------

Loss from continuing operations .................................        (1,082)          (831)        (5,451)       (12,554)

Discontinued operations:
     Estimated loss on disposal of discontinued operation .......            --             --             --           (200)
                                                                    ------------   ------------   ------------   ------------

Division net loss ...............................................   $    (1,082)   $      (831)   $    (5,451)   $   (12,754)
                                                                    ============   ============   ============   ============
</TABLE>


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