DiaMedica Adopts Shareholder Rights Plan

WINNIPEG, MANITOBA--(Marketwire - April 14, 2011) - DiaMedica (TSX VENTURE:DMA) announced today that its Board of Directors has adopted a shareholder rights plan (the "Plan"), effective as of this date. The Plan is designed to provide adequate time for the Board of Directors and the shareholders to assess an unsolicited takeover bid for DiaMedica, to provide the Board of Directors with sufficient time to explore and develop alternatives for maximizing shareholder value if a takeover bid is made, and to provide shareholders with an equal opportunity to participate in a takeover bid and receive full and fair value for their common shares (the "Common Shares"). The Company is not adopting the Plan in response to any specific proposal to acquire control of the Company, nor is it aware of any such effort.

Shareholders will be asked to approve the Plan at the Company's upcoming annual meeting. The Plan, if approved by the shareholders, will expire at the close of the Company's annual meeting of shareholders in 2014.

The rights issued under the Plan will initially attach to and trade with the Common Shares and no separate certificates will be issued unless an event triggering these rights occurs. The rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20 percent or more of the outstanding Common Shares without complying with the "Permitted Bid" provisions of the Plan or without approval of the Board of Directors. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase Common Shares at a 50 percent discount to the market price at the time.

Under the Plan, a Permitted Bid is a bid made to all holders of the Common Shares and which is open for acceptance for not less than 60 days. If at the end of 60 days at least 50 percent of the outstanding Common Shares, other than those owned by the offeror and certain related parties have been tendered, the offeror may take up and pay for the Common Shares but must extend the bid for a further 10 days to allow other shareholders to tender.

The issuance of Common Shares upon the exercise of the rights is subject to receipt of certain regulatory approvals. The rights plan is similar to other shareholder rights plans recently adopted by numerous other Canadian companies. A material change report and a complete copy of the Plan will be filed on the System for Electronic Document Analysis and Retrieval (SEDAR) shortly.

DiaMedica further announces the issuance of 100,000 stock options to members of the Board of Directors. The options are exercisable at $1.44 and are the semi-annual award to members of the Board under an automatic issuance mechanism designed to eliminate any subjectivity as to timing or price.

About DiaMedica

DiaMedica is a biopharmaceutical company that develops novel therapeutic products designed to improve the lives of people with Type 1 diabetes, Type 2 diabetes and other large, medically unmet diseases. DiaMedica's lead product candidate, DM-199, has been shown to significantly improve glucose metabolism and protect and proliferate beta cells.

The Company is listed on the TSX Venture Exchange under the trading symbol "DMA".

FORWARD-LOOKING STATEMENTS

The statements made in this press release that are not historical facts contain forward-looking information that involves risk and uncertainties. All statements, other than statements of historical facts, which address DiaMedica's expectations, should be considered forward-looking statements. Such statements are based on management's exercise of business judgment as well as assumptions made by and information currently available to management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect a current view of future events and are subject to certain risks and uncertainties as contained in the Corporation's filings with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those anticipated in these forward-looking statements. The Corporation undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events. Although management believes that expectations are based on reasonable assumptions, no assurance can be given that these expectations will materialize.