DiaMedica Inc. Announces Public Offering

WINNIPEG, MANITOBA--(Marketwire - June 24, 2011) - DiaMedica Inc. ("DiaMedica" or the"Company") (TSX VENTURE:DMA), announced today that it has entered into an engagement letter with Sora Group Wealth Advisors Inc. ("Sora") and filed a preliminary short form prospectus (the "Prospectus") in connection with the public offering (the "Offering") of units of the Company (the "Units"). The Offering is expected to raise up to $3 million.

Each Unit will consist of one common share in the capital stock of the Company (a "Common Share") and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder thereof to purchase one Common Share within two years from the initial closing date of the Offering, subject to an acceleration of the expiry date of such Warrants in certain circumstances as more particularly described in the Prospectus.

The Offering is being placed on a best efforts basis by Sora. The price of the Units and the exercise price of the Warrants will be determined by DiaMedica and Sora in the context of the market.

The Company has granted to Sora, as agent, an option exercisable in whole or in part at any time prior to the closing date of the Offering, to increase the number of Units offered by up to 15%.

DiaMedica has applied to the TSX Venture Exchange (the "Exchange") to list the Common Shares sold pursuant to the Offering and the Common Shares underlying the Warrants. Listing is subject to DiaMedica satisfying all requirements of the Exchange.

The total net proceeds from the Offering will be used to fund our ongoing research and development programs, including preparation for clinical trials for our lead products, as more particularly described in the Prospectus.

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 protect and proliferate beta cells and significantly improve glucose metabolism in preclinical models.

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 Company'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 Company 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.