DiaMedica Inc. Closes Non-Brokered Private Placement

MINNEAPOLIS, MINNESOTA--(Marketwired - Jan. 3, 2014) -

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DiaMedica Inc. (TSX VENTURE:DMA), is pleased to announce that it has completed and closed a non-brokered private placement of 154,500 Units at a price of $0.90 per unit for aggregate gross proceeds of approximately $139,000 (the "Offering"). Each Unit will consist of one common share in the capital stock of DiaMedica (a "Common Share") and one half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one additional Common Share for the price of $1.10 prior to December 23, 2015, subject to an acceleration of the expiry date of such Warrants in certain circumstances. A finder's fee equal to 6% cash and 6% warrants of the aggregate gross proceeds raised under the Offering may be payable to persons arm's length to DiaMedica at its discretion in connection with introducing subscribers to the Offering.

DiaMedica intends to use the net proceeds from the Offering for research and development, including a Phase II clinical trial for Type 2 diabetes, and for working capital and general and administrative purposes.

The common shares issued pursuant to the Private Placement are subject to a statutory hold period which expires on May 4, 2014. The Offering remains subject to certain conditions including approval of the TSX Venture Exchange.

About DiaMedica

DiaMedica Inc. (TSX VENTURE:DMA) is a biotechnology company developing first-in-class treatments for the treatment of diabetes. DiaMedica's lead compound, DM199, is a recombinant human protein for the treatment of both Type 1 and Type 2 diabetes and their complications. The Company is also developing the first therapeutic GPCR agonist monoclonal antibody, DM204, for the treatment of Type 2 diabetes and cardiovascular disease. DiaMedica's shares trade on the TSX Venture Exchange (TSX VENTURE:DMA). For more information please visit www.diamedica.com.

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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the contents of this News Release.